Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Tempus Applied Solutions Holdings, Inc. |
Entity Central Index Key | 1,628,871 |
Trading Symbol | TMPS |
Amendment Flag | false |
Document Type | S1 |
Document Period End Date | Sep. 30, 2017 |
Entity Filer Category | Smaller Reporting Company |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 24,029 | $ 592,514 | $ 1,288,495 |
Restricted cash | 50,007 | 1,100,000 | |
Accounts receivable: | |||
Trade, net | 1,478,404 | 1,415,083 | 855,963 |
Other | 61,105 | 1,119 | 21,697 |
Related party, net | 38,962 | 27,818 | |
Inventory | 24,999 | ||
Other assets | 88,701 | 98,871 | 373,074 |
Current assets of discontinued operations | 5,223 | 65 | |
Total current assets | 1,657,462 | 2,196,556 | 3,692,046 |
PROPERTY AND EQUIPMENT, NET | 5,727,327 | 5,933,940 | 117,398 |
OTHER ASSETS | |||
Deposits | 49,428 | 51,428 | 515,000 |
Intangibles, net | 535,528 | 554,839 | 537,884 |
Noncurrent assets of discontinued operations | 501,711 | ||
Total other assets | 584,956 | 1,107,978 | 1,052,884 |
Total assets | 7,969,745 | 9,238,474 | 4,862,328 |
Accounts payable: | |||
Trade | 2,453,569 | 3,363,229 | 995,105 |
Related party, net | 949,112 | 1,489,400 | 331,337 |
Accrued liabilities | 975,852 | 874,286 | 1,313,970 |
Deferred revenue | 48,130 | ||
Capital Lease obligation | 5,835,181 | ||
Notes Payable-Related Party | 6,200,000 | ||
Customer deposits, net | 688,275 | 165,094 | 754,545 |
Current liabilities of discontinued operations | 2,799 | 569,937 | |
Total current liabilities | 11,269,607 | 12,297,127 | 3,443,087 |
LONG TERM LIABILITIES | |||
Common stock warrant liability | 127,135 | 102,185 | 11,242,800 |
Total long term liabilities | 127,135 | 102,185 | 11,242,800 |
Total liabilities | 11,396,742 | 12,399,312 | 14,685,887 |
Commitments and contingencies - Note 9 | |||
STOCKHOLDERS' DEFICIT | |||
Preferred stock, $0.0001 par value; 40,000,000 shares authorized, -0- and 4,578,070 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 458 | 137 | |
Common stock, $0.0001 par value; 100,000,000 shares authorized | 1,781 | 1,106 | 884 |
Additional paid in capital | 10,267,889 | 10,050,746 | 262,496 |
Accumulated deficit | (13,696,667) | (13,213,148) | (10,087,076) |
Total stockholders' deficit | (3,426,997) | (3,160,838) | (9,823,559) |
Total liabilities and stockholders' deficit | $ 7,969,745 | $ 9,238,474 | $ 4,862,328 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 40,000,000 | 40,000,000 | 40,000,000 |
Preferred stock, shares issued | 0 | 4,578,070 | 1,369,735 |
Preferred stock, shares outstanding | 0 | 4,578,070 | 1,369,735 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 17,805,234 | 11,064,664 | 8,836,421 |
Common stock, shares outstanding | 17,805,234 | 11,064,664 | 8,836,421 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||||||
REVENUES | $ 3,195,822 | $ 3,741,639 | $ 11,655,027 | $ 12,335,250 | $ 18,775,955 | $ 11,933,433 |
COST OF REVENUE | 2,816,231 | 3,456,863 | 9,645,159 | 12,072,877 | 19,083,834 | 11,468,010 |
Gross profit (loss) | 379,591 | 284,776 | 2,009,868 | 262,373 | (307,879) | 465,423 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 462,544 | 770,984 | 1,985,219 | 3,366,180 | 4,833,515 | 4,614,846 |
Total operating profit (loss) | (82,953) | (486,208) | 24,649 | (3,103,807) | (5,141,394) | (4,149,423) |
OTHER INCOME (EXPENSE) | ||||||
Interest income | 97 | 1,793 | 2,036 | |||
Interest expense | (156,274) | (10,493) | (498,107) | (10,493) | (18,293) | (22,334) |
Non-operational income (expense) | 597,341 | 389,477 | (10,158) | 1,262,033 | 2,031,579 | (3,354,064) |
Total other income (expense) | 441,067 | 378,984 | (508,168) | 1,253,333 | 2,015,322 | (3,376,398) |
NET INCOME / (LOSS) FROM CONTINUING OPERATIONS | 358,114 | (107,224) | (483,519) | (1,850,474) | (3,126,072) | (7,525,821) |
NET LOSS FROM DISCONTINUED OPERATIONS | (391,199) | (1,223,545) | ||||
NET LOSS | $ 358,114 | $ (498,423) | $ (483,519) | $ (3,074,019) | $ (3,126,072) | $ (7,525,821) |
BASIC AND DILUTED LOSS PER COMMON SHARE: | ||||||
Continuing operations | $ 0.02 | $ (0.01) | $ (0.04) | $ (0.18) | ||
Discontinued operations | (0.04) | (0.13) | ||||
NET LOSS PER SHARE: | $ 0.02 | $ (0.05) | $ (0.04) | $ (0.31) | ||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED | 17,707,136 | 11,064,664 | 13,428,930 | 10,024,972 | ||
BASIC LOSS PER COMMON SHARE | $ (0.30) | $ (1.30) | ||||
DILUTED LOSS PER COMMON SHARE | $ (0.30) | $ (1.30) | ||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC | 10,276,046 | 5,807,166 | ||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, DILUTED | 10,276,046 | 5,807,166 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) | Total | Common stock $0.0001 par value | Preferred stock $0.0001 par value | Additional paid in capital | Accumulated deficit |
Balance at Dec. 31, 2014 | $ 898,111 | $ 364 | $ 1,009,737 | $ (111,990) | |
Balance, Shares at Dec. 31, 2014 | 3,642,084 | ||||
Net loss | (7,525,821) | (7,525,821) | |||
Distributions | (309,015) | (309,015) | |||
Business Combination, net | 2,525,865 | $ 477 | $ 137 | 2,525,251 | |
Business Combination, net, Shares | 4,774,465 | 1,369,735 | |||
Issuance of common stock and warrants | 1,000,000 | $ 38 | 999,962 | ||
Issuance of common stock and warrants, Shares | 375,000 | ||||
Issuance of common stock penalty shares | 262,501 | $ 5 | 262,496 | ||
Issuance of common stock penalty shares, Shares | 44,872 | ||||
Fair value of Series A and B warrant liabilities | (6,675,200) | (6,675,200) | |||
Adjustment to additional paid in capital | 2,140,250 | (2,140,250) | |||
Balance at Dec. 31, 2015 | (9,823,559) | $ 884 | $ 137 | 262,496 | (10,087,076) |
Balance, Shares at Dec. 31, 2015 | 8,836,421 | 1,369,735 | |||
Net loss | (3,126,072) | (3,126,072) | |||
Conversion of warrant liability to common stock | 2,797,362 | $ 198 | 2,797,164 | ||
Conversion of warrant liability to common stock, Shares | 1,986,112 | ||||
Conversion of warrant liability to preferred stock | 6,340,281 | $ 321 | 6,339,960 | ||
Conversion of warrant liability to preferred stock, Shares | 3,208,335 | ||||
Issuance of common stock for acquisition of Tempus Jets, Inc. | 500,000 | $ 24 | 499,976 | ||
Issuance of common stock for acquisition of Tempus Jets, Inc., Shares | 242,131 | ||||
Stock-based compensation | 151,150 | 151,150 | |||
Balance at Dec. 31, 2016 | (3,160,838) | $ 1,106 | $ 458 | 10,050,746 | (13,213,148) |
Balance, Shares at Dec. 31, 2016 | 11,064,664 | 4,578,070 | |||
Net loss | (483,519) | (483,519) | |||
Conversion of preferred shares to common stock | $ 458 | $ (458) | |||
Conversion of preferred shares to common stock, Shares | 4,578,070 | (4,578,070) | |||
Conversion of warrant liability to common stock | 173,000 | $ 217 | 172,783 | ||
Conversion of warrant liability to common stock, Shares | 2,162,500 | ||||
Stock-based compensation | 44,360 | 44,360 | |||
Balance at Sep. 30, 2017 | $ (3,426,997) | $ 1,781 | $ 10,267,889 | $ (13,696,667) | |
Balance, Shares at Sep. 30, 2017 | 17,805,234 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Stockholders' Equity [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES-CONTINUING OPERATIONS | ||||
Net loss | $ (483,519) | $ (1,850,474) | $ (3,126,072) | $ (7,525,821) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||||
Stock-based compensation expense | 44,360 | 175,677 | 151,150 | |
Depreciation and amortization | 203,741 | 59,490 | 262,418 | 23,029 |
Non-cash stock issuance | 262,501 | |||
Provision for doubtful accounts | 22,769 | 14,600 | ||
Provision for standby letter of credit | 750,000 | |||
Loss on conversion of warrant liability to stock | 3,505,300 | 3,505,300 | ||
Fair value adjustment of common stock warrants | 24,950 | (4,759,207) | (5,508,272) | 3,095,700 |
Changes in operating assets and liabilities: | ||||
Accounts receivable-trade | (200,247) | (147,320) | (581,889) | (870,563) |
Accounts receivable-other | (59,986) | (159,717) | 20,578 | (21,697) |
Due to/from related parties, net | (501,326) | 66,553 | 1,146,919 | 273,418 |
Inventory | 24,999 | 24,999 | (24,999) | |
Other current assets | 10,170 | 123,141 | 274,203 | (373,074) |
Deposits | 2,000 | 463,572 | 462,828 | (515,000) |
Accounts payable-trade | (544,841) | 1,781,438 | 2,786,182 | 946,939 |
Accrued liabilities | 101,566 | (840,249) | (401,656) | 527,962 |
Deferred revenue | (48,130) | (48,130) | 48,130 | |
Customer deposits, net | 660,107 | (498,096) | (475,600) | 754,545 |
Net cash used for operating activities-continuing operations | (743,025) | (2,103,023) | (1,484,273) | (2,634,330) |
CASH FLOWS FROM INVESTING ACTIVITIES-CONTINUING OPERATIONS | ||||
Purchases of property and equipment | (35,467) | (36,667) | (129,530) | |
Proceeds from the sale of property and equipment | 22,183 | |||
Purchases of intangible assets | (41,676) | (44,710) | (462,515) | |
Purchase of business, net of cash acquired | (50,000) | |||
Decrease in restricted cash | 50,007 | 900,000 | 1,049,993 | (1,100,000) |
Net cash provided by investing activities-continuing operations | 72,190 | 822,857 | 968,616 | (1,742,045) |
CASH FLOWS FROM FINANCING ACTIVITIES-CONTINUING OPERATIONS | ||||
Repayment of loan from officer | (489,899) | |||
Issuance of common stock, preferred stock and warrants pursuant to Business Combination and Financing (see Note 17) | 16,000,000 | |||
Issuance of common stock and warrants | 1,000,000 | |||
Payment of costs related to Business Combination and Financing (see Note 17) | (12,214,875) | |||
Cash from business acquired pursuant to the Business Combination | 212,640 | |||
Member distributions prior to Business Combination | (309,015) | |||
Payments on capital lease obligations | (180,324) | |||
Proceeds from conversion of warrants | 173,000 | |||
Net cash provided by financing activities-continuing operations | 173,000 | (180,324) | 4,198,851 | |
CASH FLOWS FROM DISCONTINUED OPERATIONS | ||||
Operating cash flows | (570,650) | 10,795 | ||
Investing cash flows | 500,000 | (9,234) | ||
Financing cash flows | ||||
Net cash (used in) provided by discontinued operations | (70,650) | 1,561 | ||
Net decrease in cash | (568,485) | (1,278,605) | (695,981) | (177,524) |
CASH AND CASH EQUIVALENTS | ||||
Cash and cash equivalents at the beginning of the period held by Tempus Applied | 592,449 | 1,288,495 | ||
Cash and cash equivalents at the beginning of the period held by Tempus Jets | 65 | |||
Cash and cash equivalents at the beginning of the period | 592,514 | 1,288,495 | 1,288,495 | 1,466,019 |
Cash and cash equivalents at the end of the period | 24,029 | 9,890 | 592,514 | 1,288,495 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Cash paid for interest | 498,107 | 10,493 | 607,969 | 22,334 |
Supplemental disclosure of non-cash investing and financing activities: | ||||
Intangible assets acquired through acquisition of Tempus Jets, Inc. | 500,000 | 500,000 | ||
Issuance of stock for exercise of warrants | 9,137,643 | 9,137,643 | ||
Initial fair value of common stock warrant liability | 8,147,100 | |||
Aircraft acquired under capital lease | $ 6,015,505 | |||
Conversion of capital lease obligation to notes payable - related party | (5,835,181) | |||
Conversion of account payables - trade to notes payables - related party | $ (364,819) |
Description of Organization and
Description of Organization and Business Operations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Description of Organization and Business Operations [Abstract] | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Tempus Applied Solutions Holdings, Inc. (“we”, the “Company” or “Tempus Holdings”) is a Delaware corporation organized on December 19, 2014. Tempus provides turnkey flight operations, customized design, engineering and modification solutions and training services that support critical aviation missions of the United States Department of Defense (the “DoD”), the U.S. intelligence community, foreign governments, heads of state and high net worth individuals worldwide. The Company has its headquarters in Williamsburg, Virginia. The Company’s activities are subject to significant risks and uncertainties, including without limitation the risks of deadline and budget overruns and risks specific to government and international contracting businesses. | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Tempus Applied Solutions Holdings, Inc. (“we”, the “Company” or “Tempus Holdings”) is a Delaware corporation organized on December 19, 2014 as a direct, wholly owned subsidiary of Chart Acquisition Corp. (“Chart”). We were formed solely for the purpose of effecting a business combination between Chart and Tempus Applied Solutions, LLC (“Tempus”). Tempus was organized under the laws of Delaware on December 4, 2014 and provides turnkey flight operations, customized design, engineering and modification solutions and training services that support critical aviation missions of the United States Department of Defense (the “DoD”), the U.S. intelligence community, foreign governments, heads of state and high net worth individuals worldwide. Tempus has the following six subsidiaries: three wholly owned operating subsidiaries, Global Aviation Support, LLC, Proflight Aviation Services LLC and Tempus Jets, Inc., and three recently formed, wholly owned entities that do not yet have any operations, Tempus Applied Solutions, Inc., Tempus Aero Solutions SIA, and Tempus Training Solutions LLC. On March 1, 2017, the Company entered into a Stock Purchase Agreement (the “Agreement”), to be effective as of January 1, 2017, for the sale of Tempus Jets, Inc. See Note 18 below. The Company has its headquarters in Williamsburg, Virginia. The Company’s activities are subject to significant risks and uncertainties, including without limitation the risks of deadline and budget overruns and risks specific to government and international contracting businesses. On July 31, 2015, pursuant to an Agreement and Plan of Merger dated as of January 5, 2015, as amended (the “Merger Agreement”) by and among Tempus Holdings, Chart, Tempus, the holders of Tempus’ membership interests named in the Merger Agreement (the “Members”), Benjamin Scott Terry and John G. Gulbin III (together, in their capacity under the Merger Agreement as the representative of the Members for the purposes set forth therein, the “Members’ Representative”), Chart Merger Sub Inc. (“Chart Merger Sub”), Chart Financing Sub Inc. (“Chart Financing Sub”), TAS Merger Sub LLC (“Tempus Merger Sub”), TAS Financing Sub Inc. (“Tempus Financing Sub”), Chart Acquisition Group LLC (“CAG”), in its capacity under the Merger Agreement as the representative of the equity holders of Chart and Tempus Holdings (other than the Members and their successors and assigns) for the purposes set forth therein and, for the limited purposes set forth therein, CAG, Joseph Wright and Cowen Investments LLC, the following was effected: (i) Chart Financing Sub and Chart Merger Sub merged with and into Chart, with Chart continuing as the surviving entity; (ii) Tempus Financing Sub and Tempus Merger Sub merged with and into Tempus, with Tempus continuing as the surviving entity; and (iii) each of Chart and Tempus became wholly owned subsidiaries of the Company. We refer to the transactions contemplated by the Merger Agreement as the “Business Combination.” The consummation of the Business Combination was preceded by a series of privately negotiated transactions, referred to collectively herein as the “Financing”, involving aggregate cash investments of $10.5 million by three outside investor entities (or affiliates thereof) that had not previously invested in Chart or Tempus (the “New Investors”), aggregate cash investments of $5.0 million by the Sponsor, Mr. Joseph Wright and Cowen (collectively, the “Chart Affiliate Investors”) and a cash investment of $500,000 by the former Chief Financial Officer of Tempus (through his individual retirement account) (the “Tempus Affiliate Investor” all together with the Chart Affiliate Investors, the “Affiliate Investors, and together with the New Investors, the “Investors”). |
Going Concern
Going Concern | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Going Concern [Abstract] | ||
GOING CONCERN | 2. GOING CONCERN The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern. The Company has suffered recurring losses from operations since inception, has had recurring negative cash flows from operations, and it currently has a working capital deficit, which raises substantial doubt about the Company’s ability to continue as a going concern. In addition, as disclosed in Note 14, subsequent to September 30, 2017, the Company elected to terminate a customer contract which will impact the Company’s future revenue and cash flow. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. The Company’s ability to continue as a going concern is dependent on its ability to generate profitable operations in the future and/or obtain the necessary financing to meets its obligations and repay its liabilities arising from the normal business operations when they come due. The Company continues to explore possibilities for raising both working capital and longer-term capital from outside sources in various possible transactions. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. Nevertheless, whether, and when, the Company can attain positive operating cash flows for operations is highly dependent on the commencement of new contracts and the timing of their commencement. There can be no assurance that the Company’s cash flows or costs of operations will develop as currently expected. | 2. GOING CONCERN The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern. The conditions noted below raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. Historically, the Company has experienced operating losses and negative cash flows from operations, and it currently has a working capital deficit, due principally to delays in the commencement of contracts and low margins on initial contracts. In addition, the Company is seeking financing in order to fund a purchase obligation of $5.5 million related to an aircraft. These conditions raise substantial doubt about the Company’s ability to continue as a going concern, especially in the near term and within one year after the date that the consolidated financial statements are issued. In light of the foregoing, the Company has implemented cost cutting initiatives, including reductions in our employee headcount, facilities and other expenses. Headcount has been reduced from 52 in June 2016 to 22 as of December 31, 2016. The Company expects to undertake additional cost-cutting measures in the future to the extent consistent with the provision of full performance under the Company’s contracts with customers, including the disposition of Tempus Jets, Inc. and other unprofitable entities. In addition, the Company continues to explore possibilities for raising both working capital and longer-term capital from outside sources in various possible transactions. Management expects that these efforts will begin to achieve results in 2017 and, assuming the timely commencement of new contracts, that the Company will begin to reduce its working capital deficit over the coming year. Nevertheless, whether, and when, the Company can attain positive operating cash flows from operations is highly dependent on the commencement of new contracts and the timing of their commencement. There can be no assurance that the Company’s cash flows or costs of operations will develop as currently expected. Our cash flows and liquidity plans remain subject to a number of risks and uncertainties. See “Item 1A. Risk Factors” of our Annual Report on Form 10-K (the “Form 10-K”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested these condensed consolidated financial statements be read in conjunction with the December 31, 2016 audited consolidated financial statements and the accompanying notes thereto. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of warrant liabilities, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgement. It is at reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3-5 years of respective assets. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statement of operations. Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, Federal Aviation Administration (the “FAA”) licenses and independent research and development costs associated with the development of supplemental type certificates (“STCs”). STCs are authorizations granted by the FAA for specific modifications of a certain aircraft. An STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of September 30, 2017 and 2016 we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulations (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite-lived. It is the Company’s policy to commence amortization of computer software upon the date that assets are placed into service. Amortization is computed on a straight-line basis over a 3-year life. Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and Marketing expense was $144,007 and $620,829 for the nine months ended September 30, 2017 and 2016, respectively. Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities that are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight- line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft (which are based on actual aircraft flight hours) and modification of aircraft that will be utilized for the provision of leased aircraft services to our customers. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $29,302 and $37,369 allowance for doubtful accounts as of September 30, 2017 and December 31, 2016, respectively. In June 2016, the Company entered a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately $2.0 million of receivables has been sold under the factoring agreement during fiscal year 2016 and the first, second and third quarters of 2017. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of ASC 860, “Transfers and Servicing” (“ASC 860”). The amount due from the factoring company, net of advances received from the factoring company, was $0 at September 30, 2017. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in the Other Income / Expense in the Consolidated Statement of Operations. In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. Amounts receivables from customers are offset against the customer deposit upon termination of the contract, if the contract permits offsetting. As of September 30, 2017, and December 31, 2016, the Company held $688,275 and $165,094, respectively, in customer deposits, net. Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation expense is recognized on a straight-line basis over the requisite service period. Foreign Currency Translation The measurement currency of the Company is the U.S. Dollar. Transactions in foreign currencies are translated at the exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in other than the measurement currency, if any, are translated at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in earnings. Net Earnings (Loss) per Share Basic and diluted net loss per share information is presented under the requirements of ASC Topic 260, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, warrants and convertible notes in the weighted-average number of common shares outstanding for a period, if dilutive. As the Company has incurred losses for the nine months ended September 30, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. For the nine months ended September 30, 2017 and 2016, there were 13,428,930 and 10,024,972 weighted average shares outstanding, respectively. Reclassification Prior period accounts receivable from related parties of $396,986 were reclassified and netted against prior period accounts payable to related parties of $1,886,386. The balance of accounts payables to related parties after the reclassification is $1,489,400 as per December 31, 2016. Certain other prior period amounts have been reclassified to conform to the current period presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended September 30, 2016. The error was not material to the unaudited consolidated financial statements for the nine months period ended September 30, 2016 since the correction of the error increased assets and liabilities by the same amount. | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United State of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Because Tempus was deemed the accounting acquirer in the Business Combination, which was consummated on July 31, 2015, the historical financial information for the years ended December 31, 2016 and 2015 reflects the financial information and activities of Tempus only. In conjunction with the Business Combination, all outstanding membership interests of Tempus were exchanged for shares of the Company’s common stock. The historical members’ equity of Tempus (which is a limited liability company) has been retroactively adjusted to reflect the stockholders’ equity structure of Tempus Holdings (which is a corporation), using the respective exchange ratios established in the Business Combination. This reflects the number of shares Tempus Holdings issued to the members of Tempus upon the consummation of the Business Combination. Accordingly, all shares and per share amounts for all periods presented in these consolidated financial statements and the notes thereto have been adjusted retrospectively, where applicable, to reflect the respective exchange ratios established in the Business Combination. For details on the conversion of Tempus’ membership interests into Company common stock, see the Company’s Current Report on Form 8-K filed with the SEC on August 6, 2015 in connection with the Business Combination. The Company manages, analyzes and reports on its business and results of operations on the basis of one operating segment, flight operations and support. Our chief executive officer is the chief operating decision maker. Principles of Consolidation The consolidated financial statements include the accounts of Tempus Holdings and its subsidiaries. Significant inter-entity accounts and transactions have been eliminated. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Income Tax The Company follows the reporting requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes”, which requires an asset and liability approach to financial accounting and reporting for income taxes. The Company recognizes deferred tax assets or liabilities based on differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts calculated on enacted tax laws and rates applicable to the periods in which the differences are expected to be ultimately realized. FASB ASC 740, Income Taxes, sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. This interpretation uses a two-step approach wherein a tax benefit is recognized if a position is more-likely-than-not to be sustained upon examination by taxing authorities. The amount of the benefit is then measured to be the highest tax benefit that is greater than 50% likely to be realized. Tempus, a limited liability company, was the a The accompanying consolidated financial statements reflect a provision or liability for Federal and state income taxes for the period commencing January 1, 2015 through July 31, 2015 (the effective date of the Business Combination) for Chart, the predecessor company, and for Tempus Holdings for the period commencing July 31, 2015 (the effective date of the Business Combination) through December 31, 2016. The Company’s tax returns are subject to possible examination by the taxing authorities. For income tax purposes, the tax returns essentially remain open for possible examination for a period of three years after the respective filing of those returns. Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. There were no earnings in excess of billings at December 31, 2016 and 2015. The Company records payments received in advance for services to be performed under contractual agreements and billings in excess of costs on uncompleted fixed-price contracts as deferred revenue until such related services are provided. Deferred revenue was $0 and $48,130 at December 31, 2016 and 2015 respectively. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft. Pre-contract Costs We capitalize the pre-contract costs we incur, excluding start-up costs which are expensed as incurred, if we determine that it is probable that we will be awarded a specific anticipated contract. These capitalized costs are recognized as a cost of revenue ratably across flight hours that are expected to be flown, as they are actually flown, for that particular contract. Capitalized pre-contract costs of $29,790 and $334,134 at December 31, 2016 and December 31, 2015, respectively, are included in other current assets in the accompanying consolidated balance sheets. Should future orders not materialize or we determine the costs are no longer probable of recovery, the capitalized costs would be written off. Cash and Cash Equivalents For purposes of cash flow, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties, and highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash balances usually do exceed federally insured limits. Restricted Cash The Company considers cash or highly liquid debt instruments on deposit with financial institutions that are held to secure an obligation by the Company to be restricted cash. As of December 31, 2016 and 2015, the Company had a restricted cash balance of $50,007 and $1,100,000 respectively. This balance consists of a certificate of deposit that secures the Company’s credit borrowings in the amount of $50,007 and $350,000 at December 31, 2016 and 2015, respectively, and a $750,000 certificate of deposit that secured a standby letter of credit in support of the Company’s response to a formal contract bid at December 31, 2015. Standby Letters of Credit As of December 31, 2015, the Company had deposited $750,000 into a certificate of deposit to secure a standby letter of credit in support of the Company’s response to a formal contract bid. The standby letter of credit was included in restricted cash and cancellable only by the beneficiary in certain circumstances, to draw drafts on the issuing bank up to the face amount of the standby letter of credit under the rules relating to the contact billing process in which the $750,000 served as a bid bond. On February 28, 2016, the Company was notified that the beneficiary was terminating contract negotiations and liquidating the bid bond. The Company retrospectively took a full reserve against the standby letter of credit for the full amount of the $750,000, which was included in accrued liabilities at December 31, 2015. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company has established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $37,369 and $14,600 recorded as allowance for doubtful accounts as of December 31, 2016 and 2015, respectively. In June 2016, the Company entered into a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately $1.5 million of receivables have been sold under the terms of the factoring agreement during fiscal year 2016. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during the year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities” (“SFAS No. 140”). The amount due from the factoring companies, net of advances received from the factoring companies, was approximately $42,000 at December 31, 2016. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in Other Income / Expense in the Consolidated Statements of Operations. Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs, including replacement of minor items of physical properties, are charged to expense; major additions to physical properties are capitalized. It is the Company’s policy to commence depreciation upon the date that assets are placed into service. The Company recognized depreciation expense of $234,663 and $14,447 for the years ended December 31, 2016 and 2015, respectively. Depreciation is computed on a straight-line basis over the estimated service lives of the assets as follows: Years Computer equipment 3-5 Furniture and fixtures 3-5 Aircraft under capital lease 30 Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, FAA licenses as well as independent research and development costs associated with the development of supplemental type certificates (“STCs”). STC’s are authorizations granted by the FAA for specific modifications of certain aircraft. An STC authorizes us to perform modifications, installations and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of December 31, 2016 and 2015, we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulation (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite lived. On March 15, 2016, the Company purchased Tempus Jets, Inc. (“TJI”) from our CEO Benjamin Scott Terry for non-cash consideration of $500,000, paid in the form of 242,131 shares of common stock of the Company. TJI owns an operating certificate issued by the FAA in accordance with the requirements of Parts 119 and 135 of the FAR (the “Operating Certificate”). The total purchase price of $500,000 was allocated to intangibles and is considered to be indefinite-lived. The Company has filed an election under I.R.C Section 338(h)(10) to treat this qualified acquisition of stock as an acquisition of assets for tax purposes. The Company disposed of TJI effective January 1, 2017. See Note 18, Subsequent Events, below. It is the Company’s policy to commence amortization of software upon the date that assets are placed into service. The Company recognized computer software amortization expense of $27,755 and $8,582 for the years ended December 31, 2016 and 2015, respectively. Amortization is computed on a straight-line basis over the estimated service lives of the assets as follows: Years Computer software 3 Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. Customer Deposits In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. At December 31, 2016 and 2015, the Company held $278,945 and $754,545, respectively, in customer deposits. Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and marketing expense was $765,434 and $626,569 for years ended December 31, 2016 and 2015, respectively. Inventory The Company values its inventory at the lower of average cost, first-in-first-out (“FIFO”) or net realizable value. Any identified excess, slow moving, and obsolete inventory is written down to its market value through a charge to income from operations. There was $0 and $24,999 in inventory recorded at December 31, 2016 and 2015, respectively. Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation is recognized on a straight-line basis over a requisite service period. Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended March 31, 2016. The error was not material to the unaudited consolidated financial statements for the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016 since the correction of this error increased assets and liabilities by the same amount. Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the issuance of the consolidated financial statements. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, U.S. GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company has concluded that there is substantial doubt about its ability to continue as a going concern and has presented the required disclosures of this ASU in Note 2. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). Under the update, an acquirer in a business combination is no longer required to account for measurement-period adjustments retrospectively, and, instead, will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The ASU is effective for financial statements issued after December 15, 2017, and interim periods within those years. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company does not expect the impact of adopting this ASU to be material to the Company’s financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. Under the update, deferred taxes would be classified as noncurrent in the statement of financial position instead of being separated into current and non-current amounts. The ASU is effective for financial statements issued after January 1, 2017 with early adoption permitted. Additionally, the Company may apply the standard either prospectively or retrospectively. The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and adoption beginning on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update amends the guidelines for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-09 will have on its consolidated financial position, results of operations and cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash. The ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is for entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years using a retrospective transition method to each period presented. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-18 will have on its financial position, results of operations and cash flows. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
Recent Accounting Pronouncements [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 4. RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition the new standard requires additional financial statement disclosures that will enable users to understand the nature, timing and uncertainty of revenue and cash flows relating to customer contracts. This ASU, as amended, is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The guidance permits two methods of adoption, retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows as well as the method of adoption that it plans to use. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, U.S. GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company has concluded that there is substantial doubt about its ability to continue as a going concern and has presented the required disclosures of this ASU in Note 2. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight-line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and adoption beginning on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update amends the guidelines for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is permitted. The Company adopted 2016-09 effective January 1, 2017. The adoption of this standard did not have a material impact on the results of operations. With the exception of the new standards discussed above, there have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30, 2017, as compared to the recent accounting pronouncements described in our Annual report on Form 10-K for the year ended December 31, 2016, that are of significance or potential significance to us. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | ||
INCOME TAXES | 5. INCOME TAXES The Company did not record a tax provision or benefit for the period ended September 30, 2017, which is attributed primarily to the full valuation allowance that has been maintained against the Company’s net deferred tax assets as of September 30, 2017. The Company’s deferred tax assets consist principally of net operating losses, intangibles, and nondeductible reserves. The Company is currently evaluating whether some or all of its net operating losses may be limited pursuant to IRC 382. In accordance with ASC 740, “Accounting for Income Taxes”, the Company continually assesses the adequacy of the valuation allowance by assessing the tax consequences of events that have been realized in the Company’s financial statements or tax returns, tax planning strategies, and future profitability. As of September 30, 2017, the Company does not believe it is more likely than not that the deferred tax assets will be realized. | 15. INCOME TAXES The Company follows the reporting requirements of FASB ASC 740 “Income Taxes”, which requires an asset and liability approach to financial accounting and reporting for income taxes. The Company recognizes deferred tax assets or liabilities based on differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts calculated on enacted tax laws and rates applicable to the periods in which the differences are expected to be ultimately realized. These differences arose principally from the valuation of stock warrants, net operating loss carryovers, and temporary differences in deprecation methods between financial reporting and income tax basis. GAAP requires companies to assess whether valuation allowances should be recorded to offset deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such assessments, significant weight is given to evidence that can be objectively verified. A company’s current and previous losses are given more weight than its future projections. A cumulative loss position is considered a significant factor that is difficult to overcome. The Company evaluates its deferred tax assets each reporting period, including assessment of its cumulative loss position, to determine if valuation allowances are required. A significant negative factor is the Company’s cumulative loss position. This, combined with uncertain near-term economic conditions, reduces the Company’s ability to rely on projections of future taxable income in establishing its deferred tax assets valuation allowance. Due to the weight of the significant negative evidence, GAAP requires that a valuation allowance be established on all of the Company’s net deferred tax assets. The following table reconciles the income tax (benefit) provision from continuing operations computed at the U.S. federal statutory income tax rates to the income tax (benefit) provision for the years ended December 31, 2016 and 2015: 2016 2015 Federal income tax rate 34 % 34 % Income tax benefit at the federal statutory rate $ (1,062,864 ) $ (2,558,779 ) State benefit, net of federal benefit (203,126 ) (176,615 ) Permanent differences net (663,707 ) 1,057,550 Tax attributes from business combination - (434,725 ) Changes in valuation allowances 1,324,427 2,112,569 Prior period true-up 605,270 Income tax (benefit) provision $ - $ - Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2016 and 2015 were as follows: 2016 2015 Deferred tax assets: Accounts receivable $ 14,200 $ 5,548 Other reserves 26,344 7,554 Stock based compensation 57,437 - Standby letter of credit reserve - 285,000 Start-up costs 356,646 382,902 Net operating loss carryforwards 3,024,924 1,474,121 Total deferred tax assets 3,479,551 2,155,125 Less: valuation allowances (3,479,551 ) (2,155,125 ) Net deferred tax assets $ - $ - FASB ASC 740, Income Taxes, sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. This interpretation uses a two-step approach wherein a tax benefit is recognized if a position is more-likely-than-not to be sustained upon examination by taxing authorities. The amount of the benefit is then measured to be the highest tax benefit that is greater than 50% likely to be realized. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of December 31, 2016 and 2015. The Company’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of December 31, 2016 and 2015. At December 31, 2016, approximately $8,000,000 in federal and state net operating losses were available to be carried forward, expiring at various dates through 2036. Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of net operating loss carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. We had a Business Combination in 2015 and March 2016; however, we have not completed a Section 382 study to determine the limitations resulting from any ownership changes. Accordingly, the timing or amount of our net operating loss carryforwards that are available for utilization in the future may be limited in any given year. The Company’s tax returns are subject to possible examination by the taxing authorities. In general, tax returns remain open for possible examination for a period of three years after the respective filing of those returns. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Stockholders' Deficit [Abstract] | ||
STOCKHOLDERS' DEFICIT | 6. STOCKHOLDERS’ DEFICIT Preferred Stock As of September 30, 2017, we had 40,000,000 shares authorized and no shares of preferred stock outstanding. There is a total of 1,025,000 Series A Warrants outstanding that are convertible into common stock or preferred stock. The rights and obligations of the holders of the preferred stock are set forth in the certificate of designations relating thereto. Holders of preferred stock have no voting rights with respect to their preferred stock, except as required by law. Shares of preferred stock rank pari passu to the shares of common stock in respect of preferences as to dividends, distributions and payments upon our liquidation, dissolution and winding up, except that in a liquidation event, the holders of preferred stock shall be entitled to receive in cash out of our assets an amount per share of preferred stock equal to the greater of $4.00 (plus any unpaid dividends and accrued charges, as equitably adjusted for stock splits, recapitalizations and similar transactions) and the amount per share such holder would receive if such holder converted such preferred stock into common stock immediately prior to the date of such payment (without regard to any limitations on conversion), provided that if the liquidation funds are insufficient to pay the full amount due to the holders, then each holder shall receive a percentage of the liquidation funds equal to the full amount of liquidation funds payable to such holder, as a percentage of the full amount of liquidation funds payable to all holders (on an as-converted basis, without regard to any limitations on conversion set forth herein) and all holders of common stock. During the nine months ended September 30, 2017, the company issued 4,578,070 shares of common stock for conversion of 4,578,070 shares of preferred stock. Common Stock As of September 30, 2017, we had 100,000,000 shares of common stock authorized and 17,805,234 shares of common stock issued and outstanding. Further, as of September 30, 2017, the company has 7,875,000 IPO and Placement Warrants outstanding exercisable into 7,875,000 shares of common stock that were issued in exchange for former Chart warrants, and 1,025,000 Series A Warrants outstanding that are convertible into common stock or preferred stock. Between July 3, 2017 and July 14, 2017, the Company issued an aggregate of 1,175,000 shares of common stock to certain holders of Series A Warrants who exercised their rights to purchase shares. These shares were registered for sale by the holders pursuant to the prospectus (the “Prospectus”) filed under Rule 424(b)(3) on April 14, 2017, under the Securities Act of 1933, as amended (the “Securities Act”) (Registration No. 333-206527). Holders of common stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock. Holders of common stock are entitled to receive such dividends, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefore. Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors up for election at such time. During the nine months ended September 30, 2017 the company issued 4,578,070 shares of common stock for conversion of 4,578,070 shares of preferred stock. During the nine months ended September 30, 2017 the company issued 2,162,500 shares of common stock for conversion of 2,162,500 Series A warrants at a conversion price of $0.08 per share. | 14. STOCKHOLDERS’ EQUITY Preferred Stock As of December 31, 2016, we had 4,578,070 shares of preferred stock issued and outstanding. Additionally, there are a total of 3,187,500 Series A Warrants outstanding that are convertible into common stock or preferred stock. At December 31, 2015, we had 1,369,735 shares of preferred stock issued and outstanding. Additionally, there were a total of 3,187,500 Series A Warrants and 1,062,500 Series B Warrants outstanding at that time that were convertible into common stock or preferred stock (with the Series B Warrants convertible into a maximum of 5,194,449 shares using the alterative cash exercise feature as described in Note 12 above, under the heading “Series A Warrants and Series B Warrants”). The rights and obligations of the holders of the preferred stock are set forth in the certificate of designations relating thereto. At any time after its initial issuance date, each share of preferred stock is convertible into validly issued, fully paid and non-assessable shares of common stock based on a conversion price of $4.00 per share, subject to adjustment for unpaid dividends and any accrued charges, as well as equitable adjustments for stock splits, recapitalizations and similar transactions. However, it will affect the conversion of any preferred stock and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to such conversion, the holder would beneficially own in excess of either 4.99% or 9.99% (the “Maximum Percentage”) (as elected in writing by the holder on or prior to the initial issuance date of the preferred stock) of the shares of common stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, and the shares of common stock issuable to a holder pursuant to the terms of the preferred stock in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. All of the holders of the issued and outstanding preferred stock as of the date of this filing have elected a Maximum Percentage of 4.99%. Under the certificate of designations, we may not enter into or be party to a “Fundamental Transaction” unless the successor entity assumes in writing all of our obligations under the certificate of designations. A “Fundamental Transaction” means, among other things, a transaction in which we, directly or indirectly, including through subsidiaries, affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not we are the surviving corporation) another entity; (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of our properties or assets or any of our “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more entities; (iii) make, or allow one or more entities to make, or allow us to be subject to or have our common stock be subject to or party to one or more entities making, a purchase, tender or exchange offer that is accepted by at least 50% of the outstanding shares of common stock; (iv) consummate a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more entities whereby all such entities, individually or in the aggregate, acquire at least 50% of the outstanding shares of common stock; or (v) reorganize, recapitalize or reclassify our common stock. The foregoing provisions will not apply to a Fundamental Transaction where the purchaser or other successor entity provides cash consideration and such Fundamental Transaction does not involve the issuance of any securities to the holders of our securities or securities of our affiliates. If at any time we grant, issue or sell any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of common stock, which is referred to as Purchase Rights, then each holder of preferred stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of common stock acquirable upon complete conversion of all preferred stock (without taking into account any limitations or restrictions on the convertibility of the shares of preferred stock) held by such holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights. Holders of preferred stock have no voting rights with respect to their preferred stock, except as required by law. Shares of preferred stock rank pari passu to the shares of common stock in respect of preferences as to dividends, distributions and payments upon our liquidation, dissolution and winding up, except that in a liquidation event, the holders of preferred stock shall be entitled to receive in cash out of our assets an amount per share of preferred stock equal to the greater of $4.00 (plus any unpaid dividends and accrued charges, as equitably adjusted for stock splits, recapitalizations and similar transactions) and the amount per share such holder would receive if such holder converted such preferred stock into common stock immediately prior to the date of such payment (without regard to any limitations on conversion), provided that if the liquidation funds are insufficient to pay the full amount due to the holders, then each holder shall receive a percentage of the liquidation funds equal to the full amount of liquidation funds payable to such holder, as a percentage of the full amount of liquidation funds payable to all holders (on an as-converted basis, without regard to any limitations on conversion set forth herein) and all holders of common stock. Under the terms of the preferred stock, if holders convert their preferred stock and we fail to deliver common stock in response within the time periods and in the manner specified in the certificate of designations, we may suffer substantial penalties. Our Amended Charter and related Certificate of Incorporation also provides that additional shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions, applicable to such additional shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects, but subject to the rights of the holders of the preferred stock. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. Between February 2, 2016 and February 3, 2016, the Company issued an aggregate of 1,680,557 shares of preferred stock at a value of $3,361,114 to certain holders of Series B-1 Warrants who exercised their Series B-1 Warrants using the alternative cashless exercise feature and elected to receive their shares in the form of preferred stock rather than common stock. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On February 29, 2016 the Company issued an aggregate of 1,527,778 shares of preferred stock at a value of $2,979,167 to certain holders of Series B-1 Warrants who exercised their warrants using the alternative cashless exercise feature and elected to receive their shares in the form of preferred stock rather than common stock. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. Common Stock As of December 31, 2016 we had 11,064,664 shares of common stock issued and outstanding. Additionally, there are 4,578,070 issued and outstanding shares of preferred stock convertible into common stock, outstanding warrants exercisable into 7,875,000 shares of common stock that were issued in exchange for former Chart warrants, and 3,187,500 Series A Warrants outstanding that are convertible into common stock or preferred stock. At December 31, 2015 we had 8,836,421 shares of common stock issued and outstanding. Additionally, there were 1,369,735 issued and outstanding shares of preferred stock at that time that were convertible into common stock, outstanding warrants exercisable into 7,875,000 shares of common stock that were issued in exchange for former Chart warrants, and 3,187,500 Series A Warrants and 1,062,500 Series B warrants outstanding that were convertible into common stock or preferred stock (with the Series B Warrants convertible into a maximum of 5,194,449 shares using the alternative cashless exercise feature as described in note 12 above, under the heading “Series A Warrants and Series B Warrants”). Additionally, pursuant to the terms of the Merger Agreement, we may be obligated to issue additional shares of common stock thereunder to the Members (or the Members may be required to forfeit certain of their shares of common stock) as a result of (i) adjustments to the merger consideration payable to the Members as a result of Tempus’ working capital and/or debt as of the completion of the Business Combination varying from the estimates that were made at the time of the consummation of the Business Combination, (ii) Tempus meeting certain financial milestones pursuant to the earn-out provisions of the Merger Agreement, up to a total of 6,300,000 shares and (iii) any indemnification payments that are made under the Merger Agreement by delivery of shares of common stock. The shares of common stock issued to the Members under Merger Agreement are subject to certain lock-up restrictions as set forth in the Tempus Registration Right Agreement to which the Members are subject. Additionally, we may issue awards for up to a maximum of 640,616 shares of common stock under our 2015 Omnibus Equity Incentive Plan. On January 22, 2016 our compensation committee awarded 499,000 options to purchase our common stock at a price of $2.05 to our employees and our board of directors. These options are subject to a minimum vesting period of three years. Holders of common stock have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock. Holders of common stock are entitled to receive such dividends, if any, as may be declared from time to time by the board of directors in its discretion out of funds legally available therefor. Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Our board of directors is divided into three classes, each of which will generally serve for a term of three years (with a shorter period for the initial directors upon the Business Combination, where they continue until their class is up for election) with only one class of directors being elected in each year and with directors only permitted to be removed for cause. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors up for election at such time. Certain shares of common stock that were issued in the Business Combination in exchange for Chart’s common stock held by certain of its initial stockholders, which we refer to as Founder Shares, are subject to forfeiture upon certain conditions. With certain limited exceptions, the Founder Shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with the Chart’s initial stockholders, each of whom will be subject to the same transfer restrictions) until the earlier of (i) July 31, 2016 or earlier if the last sales price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after July 31, 2015, or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. In addition, 234,375 Founder Shares are subject to forfeiture pro rata by Chart’s initial stockholders in the event the last sales price of our common stock does not equal or exceed $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within 60 months following July 31, 2015. An additional 234,375 Founder Shares, will be subject to forfeiture pro rata by Chart’s initial stockholders in the event the last sales price of our common stock does not equal or exceed $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period prior to July 31, 2020. Chart’ s initial stockholders have agreed that such shares will be subject to lockup and will not sell or transfer Founder Shares that remain subject to forfeiture as described above, until such time as the related forfeiture provisions no longer apply. The securities held by Chart’s initial stockholders are also subject to certain other lock-up restrictions under the terms of the Founders’ Registration Rights Agreement, to which such stockholders are subject. We have made an adjustment to our capital contributed in excess of par to account for the fact that the Financing and Business Combination expenses, along with the valuation of the warrant liabilities associated with the warrants issued pursuant thereto, caused capital contributed in excess of par to go below zero. Any excess negative amount due to these transactions that would otherwise have been allocated to capital contributed in excess of par has now been recognized as a negative retained earnings amount. On February 24, 2016 the Company issued an aggregate of 641,666 shares of common stock at a value of $1,251,249 to certain holders of Series B-2 and Series B-3 Warrants who exercised their warrants using the alternative cashless exercise feature. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On March 15, 2016, the Company purchased TJI from our CEO Benjamin Scott Terry for consideration of $500,000, paid in the form of 242,131 shares of common stock of the Company. The number of shares issued to Mr. Terry was calculated based on the volume weighted average market price of the Company’s common stock for the previous 20 trading days (See Note 10 above). On June 24, 2016, the Company issued an aggregate of 1,344,446 shares of common stock valued at $1,546,113 to certain holders of Series B-2 and Series B-3 Warrants who exercised their warrants using the alternative cashless exercise feature. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. |
Stock Options_Stock Based Compe
Stock Options/Stock Based Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Stock Options/Stock Based Compensation [Abstract] | ||
STOCK BASED COMPENSATION/STOCK OPTIONS | 7. STOCK OPTIONS The Company maintains a stock option plan under which the Company may grant incentive stock options and non-qualified stock options to employees and non-employee directors. Stock options have been granted with exercise prices at or above the fair market value of the underlying shares of common stock on the date of grant. Options vest and expire according to terms established at the grant date. The Company records compensation expense for the fair value of stock-based awards determined as of the grant date, including employee stock options. For the nine months ended September 30, 2017 and 2016 there were -0- and 499,000 stock options granted, under the Company’s option plan, respectively. The Company recognized $44,360 and $175,677 in stock-based compensation expense for the nine months ended September 30, 2017 and 2016, respectively. Stock options to purchase 126,000 and 322,000 shares of common stock were outstanding as of September 30, 2017 and December 31, 2016, respectively. The Company uses the Black-Scholes option-pricing model to value the options. The life of the option is equivalent to the expiration of the option award. The risk-free interest rate is assumed at 1.77%. The estimated volatility is based on management’s expectations of future volatility and is assumed at 60%. Estimated dividend payout is zero, as the Company has not paid dividends in the past and, at this time, does not expect to do so in the future. Shares Weighted Options outstanding, December 31, 2016 322,000 $ 2.05 Granted to employees and non-employee directors - - Exercised - - Canceled/expired/forfeited 196,000 - Options outstanding, September 30, 2017 126,000 2.05 Options exercisable, September 30, 2017 - $ - Compensation cost is recognized over the required service period which is three years for all granted options. As of September 30, 2017, $73,932 of total unrecognized compensation cost related to stock options was expected to be recognized over the remaining 5 quarters. As of September 30, 2016, $527,032 of total unrecognized compensation cost related to stock options was expected to be recognized over the remaining 9 quarters. | 13. STOCK BASED COMPENSATION The Company maintains a stock option plan under which the Company may grant incentive stock options and non-qualified stock options to employees and non-employee directors. Stock options have been granted with exercise prices at or above the fair market value of the underlying shares of common stock on the date of grant. Options vest and expire according to terms established at the grant date. The Company records compensation expense for the fair value of stock-based awards determined as of the grant date, including employee stock options. For the years ended December 31, 2016 and 2015 there were 499,000 and 0 stock options granted, respectively, under the Company’s option plan. The Company recognized $151,150 and $0 in stock-based compensation expense for the years ended December 31, 2016 and 2015, respectively. Stock options to purchase 322,000 and 0 shares of common stock were outstanding as of December 31, 2016 and December 31, 2015, respectively. The Company uses the Black-Scholes option-pricing model to value options. The life of the option is equivalent to the expiration of the option award. The risk-free interest rate was assumed at 1.77%. The estimated volatility is based on management’s expectations of future volatility and is assumed at 60%. Estimated dividend payout is zero, as the Company has not paid dividends in the past and, at this time, does not expect to do so in the future. Shares Weighted Average Exercise Price Per Option Options outstanding, December 31, 2015 - $ - Granted to employees and non-employee directors 499,000 2.05 Exercised - - Canceled/expired/forfeited 177,000 - Options outstanding, December 31, 2016 322,000 2.05 Options exercisable, December 31, 2016 - $ - Compensation cost is recognized over the required service period which is three years for all granted options. As of December 31, 2016, $302,301 of total unrecognized compensation cost related to stock options was expected to be recognized over the remaining 8 quarters. |
Convertible Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | 8. CONVERTIBLE DEBT On April 28, 2017, the Company entered into a Note Purchase Agreement with Santiago Business Co. International Ltd, (“ Santiago Note Bluebell If the Note is fully converted by the holder, the holder would receive shares representing 82.3% of the Company’s share capital outstanding as of September 30, 2017 (taking into account the shares issued upon conversion of the Note). |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Measurements [Abstract] | ||
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for certain liabilities that are re-measured and reported at fair value for each reporting period. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2016, and September 30, 2017, and indicates the fair value hierarchy of the valuation techniques the Company has used to determine such fair value. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs use unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability: December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - September 30, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 118,125 $ 118,125 $ - $ - Series A Warrant Liability 9,010 - 9,010 - Total Warrant Liability $ 127,135 $ 118,125 $ 9,010 $ - The fair values of the Company’s warrant liabilities are determined through market, observable and corroborated sources. The approach is described below: IPO and Placement Warrants – The value of the IPO and Placement Warrants was calculated based upon the quoted price of the warrants that trade on the OTC markets under the ticker symbol TMPSW, which was $0.01 as of that date. Series A Warrants – The value of these warrants was calculated using a Black-Scholes option pricing model based on the value of the common stock, the assumed volatility of such shares and the risk free rate at the of time of valuation. Observable inputs used in the calculation of the valuations include the implied valuation of the Company’s securities based on prior sales, specifically the Financing associated with the Business Combination. Other inputs include a risk-free rate as of the valuation date and implied volatility derived from comparable publicly traded companies, as well as the quoted price of Tempus’ common shares and the quoted price of Tempus’ IPO and Placement Warrants. | 11. FAIR VALUE MEASUREMENTS The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2016 and 2015, and indicates the fair value hierarchy of the valuation techniques the Company has used to determine such fair value. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs use data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs use unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability: December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Series B Warrant Liability - - - - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2015 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 1,575,000 $ 1,575,000 $ - $ - Series A Warrant Liability 4,215,600 - 4,215,600 - Series B Warrant Liability 5,452,200 - 5,452,200 - Total Warrant Liability $ 11,242,800 $ 1,575,000 $ 9,667,800 $ - The fair values of the Company’s warrant liabilities are determined through market, observable and corroborated sources. The Company engaged an independent valuation firm (the “Valuation Firm”) to perform valuations of the warrant liabilities as of December 31, 2015. The Valuation Firm used a multi-stage process to determine the fair value of the warrants of the Company, which involved several types of analyses and calculations of value for the Company’s securities as follows: IPO and Placement Warrants -- For December 31, 2015, the value of the IPO and Placement Warrants was calculated based upon the quoted price of the warrants that trade on the OTC markets under the ticker symbol TMPSW, which was $0.20 as of that date. For December 31, 2016, the value of the IPO and Placement Warrants was calculated based upon the quoted price of the warrants that trade on the OTC markets under the ticker symbol TMPSW, which was $0.01 as of that date. Series A Warrants – – The value of these warrants was calculated using a Black-Scholes option pricing model based on the value of the common stock, the assumed volatility of such shares and the risk free rate at the time of valuation. Series B Warrants – The Valuation Firm determined the impact of various common stock values as of the expiration date of the Series B Warrants after considering the exercise features, including the alternate cashless exercise of those warrants. The Valuation Firm then used a Monte Carlo simulation to determine the probability of common stock values as of the expiration date and calculated the value of the Series B Warrants in each trial. The weighted average value of the Series B Warrants as of the valuation date was then calculated. Observable inputs used in the calculation of the valuations include the implied valuation of the Company’s securities based on prior sales, specifically the Financing associated with the Business Combination. Other inputs include a risk-free rate as of the valuation date and implied volatility derived from comparable publicly traded companies, as well as the quoted price of Tempus’ common shares and the quoted price of Tempus’ IPO and Placement Warrants. |
Customer and Vendor Concentrati
Customer and Vendor Concentration | 12 Months Ended |
Dec. 31, 2016 | |
Customer and Vendor Concentration [Abstract] | |
CUSTOMER AND VENDOR CONCENTRATION | 4. CUSTOMER AND VENDOR CONCENTRATION We have significant customer concentration and vendor concentration. Customer concentration as of and for the years ended December 31, 2016 and 2015 was: For the years ended December 31 2016 Revenue 2015 Revenue Customer A $ 4,315,189 23 % $ 4,094,994 34 % Customer B 5,923,565 32 % 6,424,766 54 % Customer C 2,783,292 15 % - 0 % Other customers 5,753,909 30 % 1,413,673 12 % $ 18,775,955 100 % $ 11,933,433 100 % December 31, 2016 December 31, 2015 Accounts Receivable Accounts Receivable Customer A $ 387,729 27 % $ 392,453 46 % Customer B 449,658 32 % 442,885 52 % Customer C 42,624 3 % - 0 % Other customers 535,072 38 % 20,625 2 % $ 1,415,083 100 % $ 855,963 100 % Vendor concentration as of and for the years ended December 31, 2016 and 2015 was: For the years ended December 31 2016 Cost of Revenue 2015 Cost of Revenue Vendor A $ 3,484,433 18 % $ 2,848,715 25 % Vendor B 2,172,579 12 % 1,106,927 10 % Vendor C 1,530,233 8 % 998,787 8 % Other 11,896,589 62 % 6,513,581 57 % $ 19,083,834 100 % $ 11,468,010 100 % December 31, 2016 December 31, 2015 Accounts Payable Accounts Payable Vendor A $ 304,826 8 % $ 195,511 20 % Vendor B 235,388 6 % 33,270 3 % Vendor C 18,616 1 % 91,355 9 % Other vendors 3,222,457 85 % 674,969 68 % $ 3,781,287 100 % $ 995,105 100 % |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
OTHER ASSETS | 5. OTHER ASSETS Other assets consist of the following: December 31, December 31, 2016 2015 Pre-contract costs $ 49,799 $ 334,134 Other prepaid expenses 49,072 38,940 Total $ 98,871 $ 373,074 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property and Equipment, Net [Abstract] | ||
PROPERTY AND EQUIPMENT, NET | 10. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: September 30, December 31, 2017 2016 Office equipment $ 135,897 $ 167,088 Furniture and fixtures 456 456 Aircraft 6,015,505 6,015,505 Total 6,151,858 6,183,049 Accumulated depreciation (424,531 ) (249,109 ) Property and equipment, net $ 5,727,327 $ 5,933,940 | 6. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: December 31, December 31, 2016 2015 Office equipment $ 168,055 $ 131,389 Furniture and fixtures 456 456 Leased Aircraft 6,015,505 - Total 6,184,016 131,845 Accumulated depreciation (249,109 ) (14,447 ) Property and equipment, net $ 5,934,907 $ 117,398 |
Intangibles, Net
Intangibles, Net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Intangibles, Net [Abstract] | ||
INTANGIBLES, NET | 11. INTANGIBLES, NET Intangibles, net consists of the following: September 30, December 31, 2017 2016 Infinite-lived intangible assets: FAA license $ 50,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 455,901 Accumulated amortization - - 455,901 455,901 Software 85,275 85,275 Accumulated amortization (55,648 ) (36,337 ) 29,627 48,938 Total intangible assets, net $ 535,528 $ 554,839 FAA licenses include the $50,000 purchase price for Proflight Aviation Services, LLC, which provides flight training services under a FAR Part 141 certificate. STC costs relate to our efforts to gain approval from the FAA for modifications to Gulfstream III, IV and V business jets to upgrade them for Future Air Navigation System (“FANS”) and Automatic Dependent Surveillance Broadcast (“ADS-B”) capabilities. Regulatory mandates in the U.S and abroad will require FANS / ADS-B compliance on certain preferred air routes on a rolling basis over the next four years. Tempus was awarded this STC in the fourth quarter of 2016. | 7. INTANGIBLES, NET Intangibles, net consists of the following: December 31, December 31, 2016 2015 Indefinite-lived intangible assets: FAA licenses $ 550,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 414,226 Accumulated amortization - - 455,901 414,226 Software 85,275 82,240 Accumulated amortization (36,337 ) (8,582 ) 48,938 73,658 Total intangible assets, net $ 1,054,839 $ 537,884 FAA licenses includes the $50,000 purchase price for Proflight Aviation Services, LLC, which provides flight training services under a FAR Part 141 certificate, and the $500,000 purchase price for TJI, which owns an Operating Certificate issued by the FAA in accordance with the requirements of Parts 119 and 135 of the FAR. The Company disposed of TJI effective January 1, 2017. See Note 18, Subsequent Events, below. STC costs relate to our efforts to gain approval from the FAA for modifications to Gulfstream III, IV and V business jets to upgrade them for Future Air Navigation System (“FANS”) and Automatic Dependent Surveillance Broadcast (“ADS-B”) capabilities. Regulatory mandates in the U.S and abroad will require FANS / ADS-B compliance on certain preferred air routes on a rolling basis over the next five years. Tempus was awarded this STC in the fourth quarter of 2016. Estimated amortization of this STC will be as follows: Estimated STC Amortization 2017 $18,236 2018 45,590 2019 136,770 2020 255,305 Total $455,901 Future amortization schedules associated with existing software is as follows: Software Amortization 2017 $28,425 2018 19,843 2019 670 Total $48,938 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Liabilities [Abstract] | |
ACCRUED LIABILITIES | 8. ACCRUED LIABILITES Accrued liabilities at December 31, 2016 include the following: December 31, December 31, 2016 2015 Reserve for standby letter of credit $ - $ 750,000 Accrued employment costs 380,903 185,567 Aircraft maintenance reserves 37,050 110,000 Board fees 104,833 34,833 Other 389,528 233,570 Total $ 912,314 $ 1,313,970 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES The Company incurred lease expense for real office and hangar space for the years ended December 31, 2016 and 2015, of $454,129 and $207,439, respectively. Lease expense for aircraft and simulators was $5,407,873 and $3,232,229 for the years ended December 31, 2016 and 2015, respectively. The Company leased office space on Waller Mill Road in Williamsburg, Virginia. The Company occupied the premises as of January 1, 2015 under a one-year lease, which was subsequently extended to February 28, 2016, after which the lease reverted to a month to month agreement. The company vacated the space August 31, 2016 and relocated to McLaws Circle in Williamsburg, Virginia to support its operations. The Company occupied the premises as of September 1, 2016 under a month-to-month sub-lease to Jackson River Aviation, LLC, an affiliate controlled by the Company’s CEO. The sublease is at or under prevailing market rates. The Company leases office space in San Marcos, Texas to support its training operations. The Company occupied the premises as of October, 1, 2015 under a fifteen (15) month lease at a rate of $10,500 per month. The lease was extended as of January 1, 2017 for an additional 12 months. The Company also leases simulators used in its training operations at this location. The simulator lease commenced on October, 1, 2015 and extends to December 31, 2016 at a rate of $3,000 per month, at which point it was also renewed for an additional 12 months. The future minimum lease payments associated with these leases at San Marcos, Texas as of December 31, 2016 total $162,000. The Company leased hangar space in Newport News, VA to support its operations. The Company occupied the premises as of October 1, 2015 under a one-year lease at a rate of $2,000 per month. The term of the lease ended and was not renewed. The future minimum lease payments associated with this lease as of December 31, 2016 is $0. Unpaid lease invoices at December 31, 2016 totaled $14,000 and are included in accounts payable. The Company leased office and hangar space in Brunswick, ME to support its operations. The Company occupied the premises as of March 1, 2016 under a six-month lease at a rate of $16,673, after which the lease has reverted to a month to month agreement. The facility and related employees were transferred to Tempus Intermediate Holdings, an affiliate of our director, John G. Gulbin, III, as of November 2016. Unpaid lease invoices at December 31, 2016 totaled $160,028 and are included in accounts payable. In 2015, the Company entered into an aircraft purchase agreement with Pilatus Business Aircraft, Ltd. for the purchase of a Pilatus PC-12 with certain special mission modifications for approximately $7.3 million. The Company entered into this agreement pursuant to a contract with a government law enforcement agency whereby Tempus would lease the aircraft to the agency. Tempus subsequently assigned the lease contract and the purchase obligation to Cowen Aviation Finance Holdings, Inc. (“CAF”) for no consideration and has entered into a services agreement with CAF whereby it will provide certain administrative, servicing and marketing services for this and other aircraft owned by CAF. CAF is owned by Cowen Group, Inc., (“Cowen”) whose board member, Joseph Wright, is also one of our board of directors. For the years ended December 31, 2016 and 2015, Tempus generated $53,082 and $0 of billings in support of CAF. Total purchases by the Company from CAF for the years ended December 31, 2016 and 2015 were $723,756 and $0, respectively. Based on the assignment of the lease contract and purchase obligation to CAF, a $750,000 customer deposit received from the law enforcement agency customer and the $500,000 deposit Tempus paid to Pilatus was transferred to CAF. At December 31, 2016 and 2015 the net payable to CAF was $62,018 and $0, respectively. Effective as of February 25, 2016, the Company leased a Gulfstream G-IV, at a rate of $70,000 a month for a period of 40 months under a capital lease. The lease permits the lessor to exercise an option to sell the aircraft to the Company at any time after November 30, 2016, or the Company to purchase the aircraft from the lessor, in either case at a value of $5,500,000. We have modified this aircraft for a government customer and are providing it to this customer at an hourly and daily rate, based on this customer’s usage of the aircraft. The monthly lease rate we are paying for this aircraft is fully expensed as cost of revenue upon each event whereby we recognize revenue with this government customer. As of November 4, 2016, the lessor exercised its option to sell the aircraft to the Company, with the sale to close in January 2017. As of the filing date, the Company has not completed the purchase, and according to the terms of the lease agreement, the Company will pay interest on the unpaid balance at the rate of LIBOR plus 5%. The Company is continuing to seek financing to facilitate the purchase of the aircraft. The Company is currently in discussions with the owner/lessor of the G-IV to extend the option to purchase to coincide with the finalization of third party financing. In the interim, the Company is continuing to make regular lease payments to the owner/lessor. The Company has employment agreements with certain executives with provisions for termination obligations in certain circumstances of up to 12 months’ severance. The Company expects to pay total aggregate base compensation of approximately $350,000 annually through 2018, plus customary fringe benefits and bonuses. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | 12. RELATED PARTY TRANSACTIONS Jackson River Aviation (“JRA”) is under common control with the Company. JRA (through its subsidiary TJI) provides FAR Part 135 aircraft charter services to the Company. Total purchases by the Company from JRA for the nine months ended September 30, 2017 and 2016 were $3,459,758 and $196,035, respectively. Billings by the Company to JRA for the nine months ended September 30, 2017 and 2016 were $845,887 and $57,053, respectively. As of September 30, 2017, the Company had a net outstanding payable to JRA of $170,025. As of December 31, 2016, the Company had a net outstanding receivable from JRA of $38,962. The majority of Tempus Intermediate Holdings, LLC (“TIH”) is owned by Firefly Financials, Ltd, which is under common control with the Company. The Manager of TIH is our CFO, Johan Aksel Bergendorff. TIH owns certain aircraft used by Tempus to provide services to certain customers. Total purchases by the Company from TIH for the nine months ended September 30, 2017 and 2016 were $2,247,955 and $1,125,246, respectively. Total billings from the Company to TIH for the nine months ended September 30, 2017 and 2016 were $806,023 and $136,482, respectively. The net outstanding payable from Tempus to TIH at September 30, 2017 and December 2016 was $636,591 and 1,284,886, respectively. Southwind Capital, LLC (“Southwind”) is controlled by R. Lee Priest, Jr., the Company’s Executive Vice President. Southwind owned certain aircraft used by Tempus to provide services to certain customers. Total purchases by the Company from Southwind for the nine months ended September 30, 2017 and 2016 were $0 and $116,545, respectively. The net outstanding payable from Tempus to Southwind at September 30, 2017 and December 31, 2016 was $142,496. Since July 1, 2017, Santiago Business Co. International Ltd, (“Santiago”) has provided CFO services to the Company, via full time service delivered by our CFO, Johan Aksel Bergendorff. The monthly fee is $12,500 plus expenses. Total billings for the nine months ended September 2017 was $48,996. As per September 30, 2017 (and as per this filing date, November 28, 2017) the outstanding balance for these services was $48,996. All related party transactions are entered into and performed under commercial terms consistent with what might be expected from a third- party service provider. See also ITEM 5. OTHER INFORMATION - 10% Senior Secured Convertible Note due April 28, 2018. | 10. RELATED PARTY TRANSACTIONS In the Business Combination, the members of Tempus received 3,642,084 shares of the Company’s common stock in exchange for all of the issued and outstanding membership interests of Tempus. The members have the right to receive up to an additional 6,300,000 shares of the Company’s common stock upon the achievement of certain financial milestones. In connection with the formation of Tempus, the Company’s former Chief Financial Officer, R. Lee Priest, Jr., loaned Tempus $500,000. Of this amount, $10,101 was allocated to the purchase of 1.0% of the membership interests of Tempus, and $489,899 took the form of a loan from an officer. The loan was unsecured and bore interest monthly at a rate of 5.0% per annum. The loan and all accrued interest was repaid during 2015. On March 15, 2016, the Company purchased TJI from our CEO Benjamin Scott Terry for non-cash consideration of $500,000, paid in the form of 242,131 shares of common stock of the Company. The purchase price was based on an independent valuation of similar operations and approved by the independent directors of the board. The number of shares issued to Mr. Terry was calculated based on the volume weighted average market price of the Company’s common stock for the previous 20 trading days. Effective as of January 1, 2017, the Company sold Tempus Jets, Inc. (“TJI”) to our CEO Benjamin Scott Terry for consideration of $500,000. See Note 18 below. TJI owns an operating certificate issued by the FAA in accordance with the requirements of Parts 119 and 135 of the FAR (the “Operating Certificate”). Prior to the Company’s purchase of TJI, TJI divested itself of substantially all of its assets other than the Operating Certificate, and settled or transferred all of its liabilities. As a result of the acquisition of TJI, the Company owns, and can operate under, the Operating Certificate. Under the Agreement, Mr. Terry and Jackson River Aviation, an affiliate of Mr. Terry’s, have indemnified the Company against liabilities that may arise from the acquisition. The transaction was approved by the independent directors of the Company after a review to determine that (a) the terms of the transaction were on an arm’s length basis; and (b) the transaction was effected by the issuance of Company securities to a person who is an owner of an asset in a business synergistic with the business of the Company, the transaction provided benefits to the Company in addition to the investment of funds and the transaction was not one in which the Company was issuing securities primarily for the purpose of raising capital or to an entity whose primary business was investing in securities. Jackson River Aviation (“JRA”) is controlled by Benjamin Scott Terry, the Company’s CEO and a member of the Company’s Board of Directors. JRA provides FAR Part 135 aircraft charter services to the Company. Total purchases by the Company from JRA for the years ended December 31, 2016 and 2015 were $304,025 and $335,795, respectively. Billings by the Company to JRA for the years ended December 31, 2016 and 2015 were $143,995 and $25,706, respectively. As of December 31, 2016, the Company had a net outstanding receivable from JRA of $38,962. As of December 31, 2015, the Company had a net outstanding payable to JRA of $7,958. TIH is controlled jointly by John G. Gulbin III and Benjamin Scott Terry, both members of our Board of Directors. Mr. Terry is also the company’s CEO. TIH owns certain aircraft used by Tempus to provide services to certain customers. In addition, Tempus, through its wholly owned subsidiary Global Aviation Support, LLC, provides flight planning, fuel handling and travel services to TIH. Prior to the close of the Business Combination, TIH provided administrative support, including human resources, financial, legal, contracts and other general administrative services to Tempus. Subsequent to the Business Combination, any administrative relationship has been limited to certain shared information technology and marketing expenses, which are incurred at cost. Total purchases by the Company from TIH for the years ended December 31, 2016 and 2015 were $1,331,510 and $1,943,992, respectively. Total billings from the Company to TIH for the years ended December 31, 2016 and 2015 were $280,296 and $776,025, respectively. The net outstanding payable from Tempus to TIH at December 31, 2016 and 2015 was $1,284,886 and $295,561, respectively. Southwind Capital, LLC (“Southwind”) is controlled by R. Lee Priest, Jr., the Company’s Executive Vice President. Southwind owned certain aircraft used by Tempus to provide services to certain customers. Total purchases by the Company from Southwind for the years ended December 31, 2016 and 2015 were $142,496 and $0, respectively. The net outstanding payable from Tempus to Southwind at December 31, 2016 and 2015 was $142,496 and $0 respectively. As of August 31, 2016, as part of the cost-cutting initiatives instituted by Tempus, the Company gave up its lease on its previous office headquarters at 133 Waller Mill Road, Williamsburg, Virginia, and relocated to office premises at 471 McLaws Circle, Suite A, Williamsburg, Virginia. The premises have been made available to the Company by JRA, which holds them under a lease. The Company uses the entire space and has begun paying JRA’s full monthly rent amount. The move has reduced the Company’s monthly lease expense from approximately $10,000 to $4,000. In 2015, the Company entered into an aircraft purchase agreement with Pilatus Business Aircraft, Ltd. for the purchase of a Pilatus PC-12 with certain special mission modifications for approximately $7.3 million. The Company entered into this agreement pursuant to a contract with a government law enforcement agency whereby Tempus would lease the aircraft to the agency. Tempus subsequently assigned the lease contract and the purchase obligation to Cowen Aviation Finance Holdings, Inc. (“CAF”) for no consideration and has entered into a services agreement with CAF whereby it will provide certain administrative, servicing and marketing services for this and other aircraft owned by CAF. CAF is owned by Cowen Group, Inc., (“Cowen”), whose CEO and Chairman, Peter Cohen, and board member, Joseph Wright, are on our board of directors. For the twelve months ended December 31, 2016 Tempus billed $53,082 to CAF under the services agreement. Total purchases by the Company from CAF for the years ended December 31, 2016 and 2015 were $723,756 and $0, respectively. Based on the assignment of the lease contract and purchase obligation to CAF, a $750,000 customer deposit received from the law enforcement agency customer and the $500,000 deposit Tempus paid to Pilatus was transferred to CAF. At December 31, 2016 and 2015, the net payable to CAF was $62,018 and $0, respectively. All related party transactions are entered into and performed under commercial terms consistent with what might be expected from a third party service provider. Certain sales and marketing, and information technology functions of the Company are supported by TIH and are expensed to the Company on a time and materials basis. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations [Abstract] | |
DISCONTINUED OPERATIONS | 13. DISCONTINUED OPERATIONS On March 1, 2017, the Company entered into a Stock Purchase Agreement (the “Agreement”), to be effective January 1, 2017, for the sale of Tempus Jets, Inc. The following table shows the components of assets and liabilities that are classified as discontinued operations in the Company’s consolidated balance sheet as per September 30, 2017 and December 31, 2016: September 30, December 31, 2017 2016 Current assets of discontinued operations $ 5,223 $ 65 Noncurrent assets of discontinued operations $ 0 $ 501,711 Current liabilities of discontinued operations $ 2,799 $ 569,937 Net assets of discontinued operations $ 2,424 $ (68,161 ) Summarized operating results related to these entities are included in discontinued operations in the accompanying consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2017 and 2016. Nine months ended Three months ended September 30 September 30 2017 2016 2017 2016 Revenue - $ 1,256,881 - $ 668,150 Gross profit - (960,075 ) - (279,179 ) Selling, general and administrative expenses - (261,998 ) - (111,250 ) Depreciation and amortization - (1,472 ) - (770 ) Net loss from discontinued operations - $ (1,223,545 ) - $ (391,199 ) |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2016 | |
Warrants [Abstract] | |
WARRANTS | 12. WARRANTS IPO and Placement Warrants Upon the consummation of the Business Combination, each outstanding Chart warrant was exchanged for a warrant to purchase one share of our common stock, and as of the date of this filing, there were 7,875,000 such warrants outstanding, of which 7,500,000 warrants were originally sold as part of the units in Chart’s initial public offering (the “IPO Warrants”) and 375,000 warrants were originally issued as part of placement units issued to CAG, Mr. Wright and Cowen in a private placement simultaneously with the consummation of Chart’s initial public offering, (“the Placement Warrants”). Each IPO and Placement Warrant entitles the holder to purchase one share of common stock at an exercise price of $11.50 per share, subject to adjustment. The IPO warrants became exercisable on August 30, 2015, and expire at 5:00 p.m., New York time, on July 31, 2020 or earlier upon redemption or liquidation. Once the IPO warrants become exercisable, we may redeem the outstanding IPO warrants at a price of $0.01 per warrant, if the last sale price of the common stock equals or exceeds $17.50 per share for any 20 trading days within a 30 trading day period ending on the third trading day before we send the notice of redemption to the warrant holders. The placement warrants, however, are non-redeemable so long as they are held by the initial holders or their permitted transferees. Series A Warrants and Series B Warrants In connection with the Financing, upon the consummation of the Business Combination on July 31, 2015, we issued a total of 3,000,000 Series A-1 Warrants and Series A-2 Warrants and 1,000,000 Series B-1 Warrants and Series B-2 Warrants. Pursuant to the Securities Purchase Agreement, on August 14, 2015, we issued an additional 187,500 Series A-3 Warrants and 62,500 Series B-3 Warrants. The Series A-1 Warrants, Series A-2 Warrants and Series A-3 Warrants are referred to collectively as the Series A Warrants, the Series B-1 Warrants, Series B-2 Warrants and Series B-3 Warrants are referred to collectively as the Series B Warrants, and the Series A Warrants and the Series B Warrants are referred to collectively as the Investor Warrants. Each Investor Warrant is immediately exercisable in cash and entitles the holder to take delivery of the shares purchased through the exercise, at the sole election of the holder, in the form of either common stock or preferred stock, subject to the Maximum Warrant Percentage, with the number of shares of preferred stock issued based on the conversion price, as described in Note 14, below, under the heading “Preferred Stock”. The Series A Warrants have an exercise price of $4.80 per share purchased and expire on July 31, 2020 and at December 31, 2016 and 2015 there were 3,187,500 warrants outstanding at each date. The Series B Warrants have an exercise price of $5.00 per share purchased. The Series B-1 Warrants expire on April 20, 2017 and the Series B-2 Warrants and B-3 Warrants expire on October 31, 2016. At December 31, 2016 and 2015 there are zero and 1,062,500 Series B Warrants outstanding, respectively. The Investor Warrants contain customary “cashless exercise” terms, pursuant to which holder of an Investor Warrant, at any time after October 31, 2015, may choose to exercise such Investor Warrant (at a time when such Investor Warrant is otherwise exercisable according to its terms) without paying cash, by effectively submitting in exchange for shares a greater number of warrants than the number of shares purchased, rather than a number of warrants equal to the number of shares purchased plus cash. The Series B Warrants (but not the Series A Warrants) also contain an additional alternative cashless exercise feature, pursuant to which, beginning from December 31, 2015 and until the expiration of such Series B Warrant, on October 31, 2016 or April 30, 2017, as applicable, if 90% of the average of the four lowest volume-weighted average prices of common stock for the preceding 10 trading days (the “Alternative Market Price”) is less than $4.00 (subject an Alternative Market Price floor of $1.80), the holder of a Series B Warrant can exercise such Series B Warrant to acquire on a cashless basis a number of shares of common stock or preferred stock equal to (depending on the Market Price) up to 488.9% of the number of shares that could otherwise be purchased under such Series B Warrant pursuant to a cash exercise, with the lower the Alternative Market Price, the more shares being available for acquisition by the Series B Warrant holder pursuant to this alternative cashless exercise. The Investor Warrants also include “full ratchet” anti-dilution protection provisions, which provide that if any shares of common stock are issued at a price less than then current exercise price of such Investor Warrant, or if any warrants, options or other securities with the right to acquire or that are convertible into or exchangeable for shares of common stock are issued with an exercise price less than the then current exercise price of such Investor Warrant, then the exercise price of such Investor Warrant will automatically be reduced to the issuance price of such new shares of common stock or the exercise price of such warrants, options or other securities with the right to acquire or that are convertible into or exchangeable for shares of common stock. These anti-dilution provisions do not apply in the case of an issuance of “Excluded Securities”, including certain option and other equity incentive awards to directors and officers, and securities issued pursuant to acquisitions or strategic transactions approved by a majority of our disinterested directors, but does not include a transaction in which we are issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. Under the terms of the Investor Warrants, we may not enter into or be party to a “Fundamental Transaction” unless the successor entity assumes in writing all of our obligations under such Investor Warrants. A “Fundamental Transaction” means, among other things, a transaction in which we, directly or indirectly, including through subsidiaries, affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not we are the surviving corporation) another entity; (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of our properties or assets of or any of our “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more entities; (iii) make, or allow one or more entities to make, or allow us to be subject to or have its common stock be subject to or party to one or more entities making, a purchase, tender or exchange offer that is accepted by at least 50% of the outstanding shares of common stock; (iv) consummate a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more entities whereby all such entities, individually or in the aggregate, acquire at least 50% of the outstanding shares of common stock; or (v) reorganize, recapitalize or reclassify its common stock. The foregoing provisions will not apply to a Fundamental Transaction where the purchaser or other successor entity, after giving effect to such Fundamental Transaction, does not have any equity securities that are then listed or designated for quotation on a national securities exchange or automated quotation system. Moreover, a holder of an Investor Warrant may choose, in connection with any Fundamental Transaction, to have us or the successor entity purchase such Investor Warrant from the holder by paying the holder cash in an amount equal to the “Black Scholes Value” (as defined in such Investor Warrant) of such Investor Warrant. Under the terms of the Investor Warrants, if we shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of common stock, then, in each such case, holders of such Investor Warrants shall be entitled to participate in such distribution to the same extent that they would have participated if they had held the number of shares of common stock acquirable upon complete exercise of such Investor Warrants (without regard to any limitations or restrictions on exercise of such Investor Warrants) immediately before the date on which a record is taken for such distribution. Under the terms of the Investor Warrants, if we grant, issue or sell any options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of common stock, which are referred to with respect to the warrants as Warrant Purchase Rights, then each holder of an Investor Warrant will be entitled to acquire, upon the terms applicable to such Warrant Purchase Rights, the aggregate Warrant Purchase Rights which such holder could have acquired if such holder had held the number of shares of common stock acquirable upon complete excise of all Investor Warrants (without taking into account any limitations or restrictions on exercise of such Investor Warrants) held by such holder immediately prior to the date on which a record is taken for the grant, issuance or sale of such Warrant Purchase Rights. Under the terms of the Series A Warrants (but not the Series B Warrants), until July 31, 2016, the holders had pre-emptive rights pursuant to which we must offer them the right to purchase at least 56.3% (with the Series A-1 entitled to purchase 35%, the Series A-2 entitled to purchase 18% and the Series A-3 entitled to purchase 3.3%) of any additional issuances by us or our subsidiaries of equity securities or securities that are convertible into, exercisable or exchangeable for, or which give the holder the right to acquire any of our equity securities or the securities of our subsidiaries, except for certain “Excluded Securities” as described above. Under the terms of the Investor Warrants, if a holder exercises an Investor Warrant and we fail to deliver common stock or preferred stock in response within the time periods and in the manner specified in the terms of such Investor Warrant, we may suffer substantial penalties. Under the terms of the Series A-1 Warrants (but not the other Investor Warrants), we may not effect the exercise of any such Investor Warrants and the exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the holder would beneficially own in excess of either 4.99% or 9.99% (the “Maximum Warrant Percentage”) (as elected in writing by the holder on or prior to the initial issuance date of the warrants) of the shares of common stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, and the shares of common stock issuable to a holder pursuant to the terms of the warrants in excess of the Maximum Warrant Percentage shall not be deemed to be beneficially owned by such holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act. All of the holders of the outstanding Series A-1 Warrants and Series B-1 Warrants as of the date of this filing have elected a Maximum Warrant Percentage of 4.99%. Between February 2, 2016 and February 3, 2016, the Company issued an aggregate of 1,680,557 shares of preferred stock valued at $3,361,114 to certain holders of Series B-1 Warrants who exercised their Series B-1 Warrants using the alternative cashless exercise feature and elected to receive their shares in the form of preferred stock rather than common stock (see Note 12 below for an explanation of this feature). These shares were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On February 24, 2016 the Company issued an aggregate of 641,666 shares of common stock valued at $1,251,249 to certain holders of Series B-2 and Series B-3 Warrants who exercised their warrants using the alternative cashless exercise feature. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On February 29, 2016 the Company issued an aggregate of 1,527,778 shares of preferred stock valued at $2,979,167 to certain holders of Series B-1 Warrants who exercised their warrants using the alternative cashless exercise feature and elected to receive their shares in the form of preferred stock rather than common stock (see Note 14 below for an explanation of this feature). These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. On June 24, 2016, the Company issued an aggregate of 1,344,446 shares of common stock valued at $1,546,113 to certain holders of Series B-2 and Series B-3 Warrants who exercised their warrants using the alternative cashless exercise feature. These shares were issued pursuant to exemptions from the registration requirements of the Securities Act under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. The quantity of issued and outstanding warrants as of December 31, 2016 and respective strike prices are outlined in the table below: Security Quantity Strike Price IPO & Placement Warrants 7,875,000 $ 11.50 Series A Warrants 3,187,500 $ 4.80 Series B Warrants - $ 5.00 |
Basic and Diluted Shares Outsta
Basic and Diluted Shares Outstanding | 12 Months Ended |
Dec. 31, 2016 | |
Basic and Diluted Shares Outstanding [Abstract] | |
BASIC AND DILUTED SHARES OUTSTANDING | 16. BASIC AND DILUTED SHARES OUTSTANDING Basic common shares outstanding as of December 31, 2016 and 2015 were 11,064,664 and 8,836,421 respectively. Our weighted average basic shares outstanding for the years ended December 31, 2016 and 2015 is calculated based on the average number of basic common shares outstanding over the period in question and is calculated as 10,276,046 and 5,807,166 shares respectively. Our weighted average diluted common shares outstanding would normally be calculated based on the sum of the weighted average basic shares outstanding and the weighted average of the shares that would convert into common stock from our preferred stock and warrants over the period in question. This conversion would be calculated on a treasury method basis based on the average closing share price of our common stock over the period in question as compared to the conversion rate of the preferred stock, and the strike price of the particular warrants. The number of warrants outstanding along with their respective strike prices can be found in Note 12, above. However, due to the fact that the Company experienced a net loss for the years ended December 31, 2016 and 2015 and diluted earnings per share would otherwise be higher than basic earnings per share, our diluted common shares outstanding are represented to be the same as our basic common shares outstanding. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2016 | |
Business Combination [Abstract] | |
BUSINESS COMBINATION | 17. BUSINESS COMBINATION The Business Combination was approved by Chart’s stockholders at a special meeting of stockholders held on July 31, 2015 (the “Special Meeting”). At the Special Meeting, 4,985,780 shares of Chart common stock were voted in favor of the proposal to approve the Business Combination and no shares of Chart common stock were voted against that proposal. In connection with the stockholders’ approval of the Business Combination, Chart redeemed a total of 2,808,329 shares of its common stock pursuant to the terms of Chart’s amended and restated certificate of incorporation. The consummation of the Business Combination was preceded by a series of privately negotiated transactions, referred to collectively herein as the “Financing”, involving aggregate cash investments of $10.5 million by three outside investor entities (or affiliates thereof) that had not previously invested in Chart or Tempus (the “New Investors”), aggregate cash investments of $5.0 million by the Sponsor, Mr. Joseph Wright and Cowen (collectively, the “Chart Affiliate Investors”) and a cash investment of $500,000 by the Chief Financial Officer of Tempus (through his individual retirement account) (the “Tempus Affiliate Investor”, and together with the Chart Affiliate Investors, the “Affiliate Investors”, and together with the New Investors, the “Investors”). In the Business Combination, the Members received 3,642,084 shares of Tempus Holdings’ common stock (the “Merger Shares”) in exchange for all of the issued and outstanding membership interests of Tempus. The number of Merger Shares received reflected a downward merger consideration adjustment (in accordance with the Merger Agreement) of 57,916 shares of Tempus Holdings common stock, based on Tempus’ estimated working capital and debt as of the closing of the Business Combination. Such merger consideration adjustment is subject to a post-closing true-up based on Tempus’ actual working capital and debt as of the closing of the Business Combination. In addition, pursuant to the earn-out provisions of the Merger Agreement, the Members have the right to receive up to an additional 6,300,000 shares of Tempus Holdings’ common stock upon the achievement of certain financial milestones. In connection with the Business Combination, Chart stockholders and warrant holders received shares of Tempus Holdings common stock and warrants to purchase shares of Tempus Holdings common stock in exchange for their existing shares of Chart common stock and existing Chart warrants. In connection with the Business Combination, (i) the Affiliate Investors received an aggregate of 1,375,000 shares of Tempus Holdings common stock, 1,031,250 Series A-2 Warrants and 343,750 Series B-2 Warrants (collectively, the “Affiliate Investor Securities”) and (ii) the New Investors received an aggregate of 1,255,265 shares of Tempus Holdings common stock, 1,369,735 shares of Tempus Holdings preferred stock, 1,968,750 Series A-1 Warrants and 656,250 Series B-1 Warrants (collectively, the “New Investor Securities,” and collectively with the Affiliate Investor Securities, the “Financing Securities”). The terms and provisions of the Financing Securities are described in more detail in the Form S-4 (as defined below), in the section therein entitled “Description of Tempus Holdings’ Securities,” which section is incorporated herein by reference. In connection with the closing of the Business Combination, the parties to the Merger Agreement waived certain conditions to closing, which waivers were consented to by the New Investors pursuant to their rights under the New Investor Purchase Agreements. The waivers made (and consented to by the New Investors) included, in substantial part: (i) the waiver of the condition that a final warrant tender offer for outstanding public warrants of Chart be concluded prior to the closing of the Business Combination; and (ii) the waiver of the condition that, immediately prior to the closing of the Business Combination, but after giving effect to the Business Combination, there be sufficient capital in Tempus and Chart, including to cover certain post-closing commitments. The issuance of the Company’s common stock and warrants to former holders of Chart common stock and warrants in connection with the Business Combination was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a registration statement on Form S-4 (File No. 333-201424), filed with the United States SEC and declared effective on July 17, 2015 (the “Form S-4”). The Form S-4 contains additional information about the Merger Agreement, the Business Combination, the Financing and the related transactions. The Merger Shares and the Financing Securities were issued pursuant to exemptions from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. Prior to the closing of the Business Combination, Chart was a shell company with no operations, formed as a special purpose acquisition company to effect a business combination with one or more operating businesses. After the closing of the Business Combination, Chart is now a subsidiary of Tempus Holdings. The following table presents the assets acquired and the liabilities assumed in the Business Combination as of July 31, 2015 as recorded by the Company on the acquisition date and the initial fair value adjustments. As Recorded by Chart Acquisition Corp. Adjustments As Recorded Assets Cash and cash equivalents $ 4,128,746 (C) $ - $ 4,128,746 Due from Sponsor 660 (B) - 660 Total assets 4,129,406 - 4,129,406 Liabilities Accounts payable $ 100,027 (B) $ - $ 100,027 Payable to affiliates of the Sponsor 6,614 (B) - 6,614 Accrued expenses 25,000 (B) - 25,000 Warrant liability 1,808,176 (336,276 )(A) 1,471,900 Total liabilities 1,939,817 (336,276 ) 1,603,541 Net assets acquired over liabilities assumed $ 2,189,589 $ 2,525,865 (A) Based on the valuation report of the Valuation Firm, (see Note 11 above) valuing the warrants as of July 31, 2015, the date of the Business Combination, the warrant liability carried on the balance sheet of Chart has been adjusted to the value calculated by the Valuation Firm. (B) As part of the Business Combination, Tempus assumed the working capital (liabilities) of Chart, net of cash and warrant liability, in the amount of ($130,981). Please see the consolidated statements of cash flows. (C) Pursuant to the Business Combination and the Financing, the Company received $16,000,000 in cash related to the sale of common stock, preferred stock and warrants. The use of the proceeds is summarized as follows: Sale of common stock, preferred stock and warrants pursuant to the Business Combination and Financing $ 16,000,000 Payment of costs related to the Business Combination and Financing (12,214,875 ) Cash from business acquired pursuant to the Business Combination 212,640 Net cash proceeds related to Business Combination $ 3,997,765 The Company allocated the $16,000,000 in proceeds among common stock, preferred stock and warrants based on the third party valuation by the Valuation Firm as of July 31, 2015 (see Note 11 above), the date of the Business Combination. The valuation of the warrants, which are classified as liabilities on the consolidated balance sheets, resulted in an adjustment to additional paid in capital, as shown in the consolidated statement of stockholders’ equity (deficit), of $6,675,200 to record the underlying value of the warrants at the estimated redemption value. |
Subsequent Event
Subsequent Event | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Subsequent Event [Abstract] | ||
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT The company has evaluated subsequent events from September 30, 2017 and November 28, 2017, the date this report was available to be issued and determined to disclose the following: i. On August 14, 2017, the Company entered into a definitive purchase agreement for the acquisition of six Lockheed L-1011, subject to satisfactory completion of inspection of the aircraft. The inspection was completed satisfactorily by the end of October, 2017. The closing of the transaction is now only subject to the seller fulfilling their obligations under the purchase agreement to remove all liens on the aircraft. The sale is expected to close in the fourth quarter of 2017. As payment for the aircraft, the Company expects to issue approximately 6.7 million shares to the seller during the fourth quarter of 2017. ii. On October 6, 2017, the Company entered into an equity financing agreement with GHS Investments LLC, a Nevada limited liability company, under which the Company may issue, over the next 24 months, shares of common stock representing up to an aggregate of $12,000,000 of equity financing. The number of shares to be issued would depend on the price per share, which will be based on a discount to the volume weighted average market price of the shares during a 10-trading day period. Shares issued under the equity financing agreement are subject to a registration rights agreement. iii. On November 22, 2017, the Company notified one of its customers that the Company was terminating an aircraft management agreement with them due to their on-going and repeated failure to make payment in full of all amounts due under the contract. The contract represents a material portion of the Company’s consolidated revenues ($4.0 million for the first nine months of 2017), but has not contributed significantly to either consolidated gross profit or net profit. The Company also informed the customer that it would seek damages for losses and expenses in light of the customer’s repudiatory breach of the contract. Depending on the outcome of negotiations with the customer, and possibly litigation, the receivables owed to the Company for services rendered, together with damages, would be applied against the operating deposit of $750,000 to be repaid to the customer following contract termination. | 18. SUBSEQUENT EVENTS In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the issuance of the financial statements. Disposition of Tempus Jets, Inc. On March 1, 2017, the Company entered into a Stock Purchase Agreement (the “Agreement”), to be effective as of January 1, 2017, with Jackson River Aviation, LLC (“JRA”), a business associated with the Company’s CEO, Benjamin Scott Terry, and with Mr. Terry, pursuant to which JRA acquired from the Company 100% of the outstanding shares of common stock of TJI. The Agreement provides at the time of the acquisition of TJI by JRA, TJI shall have at least $500,000 in accrued but unpaid third-party liabilities, and as a result, the Company’s intangible assets and accrued liabilities decreased by $500,000. The Agreement also provides that (i) TJI will, and JRA and Mr. Terry will cause TJI to, maintain TJI’s corporate existence and good standing and maintain in good standing TJI’s operating certificate issued by the United States Federal Aviation Administration in accordance with the requirements of Parts 119 and 135 of the Federal Aviation Regulations (the “Operating Certificate”), for up to two years or until JRA and Mr. Terry contribute at least $500,000 toward TJI’s liabilities relating to the maintenance of its corporate existence and good standing and the Operating Certificate; (ii) JRA and Mr. Terry will provide the Company with advance notice if they expect TJI will not have sufficient working capital to support its existence and good standing and the Operating Certificate; and (iii) for two years the Company will have a right of first refusal that will allow it to re-acquire TJI if JRA receives a bona fide written offer to directly or indirectly transfer a majority of the equity interests in TJI or all or substantially all of the assets of TJI and its subsidiaries, taken as a whole, and the Company chooses to meet the terms of that offer. The parties provided notice to holders of the Company’s outstanding Series A-1 Warrants of the Company’s intention to enter into the Agreement, which was required under the terms of the Company’s Series A-1 Warrants because, in the Company’s view, the transaction contemplated by the Agreement constitutes a “Fundamental Transaction” as defined in the Series A-1 Warrants. Pursuant to the terms of the Series A-1 Warrants, in the event of a Fundamental Transaction, each holder of Series A-1 Warrants has the right to sell its Series A-1 Warrants back to the Company for a cash price equal to the Black Scholes Value (as defined in the Company’s Series A-1 Warrants) of such Warrants, through the date that is ninety (90) days after the public disclosure of the consummation of the Fundamental Transaction by the Company. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The condensed consolidated unaudited interim financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested these condensed consolidated financial statements be read in conjunction with the December 31, 2016 audited consolidated financial statements and the accompanying notes thereto. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. These condensed consolidated unaudited financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United State of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Because Tempus was deemed the accounting acquirer in the Business Combination, which was consummated on July 31, 2015, the historical financial information for the years ended December 31, 2016 and 2015 reflects the financial information and activities of Tempus only. In conjunction with the Business Combination, all outstanding membership interests of Tempus were exchanged for shares of the Company’s common stock. The historical members’ equity of Tempus (which is a limited liability company) has been retroactively adjusted to reflect the stockholders’ equity structure of Tempus Holdings (which is a corporation), using the respective exchange ratios established in the Business Combination. This reflects the number of shares Tempus Holdings issued to the members of Tempus upon the consummation of the Business Combination. Accordingly, all shares and per share amounts for all periods presented in these consolidated financial statements and the notes thereto have been adjusted retrospectively, where applicable, to reflect the respective exchange ratios established in the Business Combination. For details on the conversion of Tempus’ membership interests into Company common stock, see the Company’s Current Report on Form 8-K filed with the SEC on August 6, 2015 in connection with the Business Combination. The Company manages, analyzes and reports on its business and results of operations on the basis of one operating segment, flight operations and support. Our chief executive officer is the chief operating decision maker. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Tempus Holdings and its subsidiaries. Significant inter-entity accounts and transactions have been eliminated. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Such estimates and assumptions impact both assets and liabilities, including but not limited to: net realizable value of accounts receivable, estimated useful lives and potential impairment of property and equipment, the valuation of intangible assets, estimate of fair value of warrant liabilities, estimates of tax liabilities and estimates of the probability and potential magnitude of contingent liabilities. Making estimates requires management to exercise significant judgement. It is at reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near-term due to one or more future non-conforming events. Accordingly, actual results could differ significantly from estimates. | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Income Tax | Income Tax The Company follows the reporting requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 “Income Taxes”, which requires an asset and liability approach to financial accounting and reporting for income taxes. The Company recognizes deferred tax assets or liabilities based on differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts calculated on enacted tax laws and rates applicable to the periods in which the differences are expected to be ultimately realized. FASB ASC 740, Income Taxes, sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. This interpretation uses a two-step approach wherein a tax benefit is recognized if a position is more-likely-than-not to be sustained upon examination by taxing authorities. The amount of the benefit is then measured to be the highest tax benefit that is greater than 50% likely to be realized. Tempus, a limited liability company, was the a The accompanying consolidated financial statements reflect a provision or liability for Federal and state income taxes for the period commencing January 1, 2015 through July 31, 2015 (the effective date of the Business Combination) for Chart, the predecessor company, and for Tempus Holdings for the period commencing July 31, 2015 (the effective date of the Business Combination) through December 31, 2016. The Company’s tax returns are subject to possible examination by the taxing authorities. For income tax purposes, the tax returns essentially remain open for possible examination for a period of three years after the respective filing of those returns. | |
Revenue Recognition | Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight- line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft (which are based on actual aircraft flight hours) and modification of aircraft that will be utilized for the provision of leased aircraft services to our customers. | Revenue Recognition The Company uses the percentage-of-completion method for accounting for long-term aircraft maintenance and modification fixed-price contracts to recognize revenues and receivables for financial reporting purposes. Revenues from firm fixed price contracts are measured by the percentage of costs incurred to date to estimated total costs for each contract. Revenues from time-and-material line items are measured by direct labor hours or flight hours incurred during the period at the contracted hourly rates plus the cost of materials, if applicable. To the extent this earned revenue is not invoiced, it is recognized as earnings in excess of billings and is represented in other accounts receivable on the consolidated balance sheets. There were no earnings in excess of billings at December 31, 2016 and 2015. The Company records payments received in advance for services to be performed under contractual agreements and billings in excess of costs on uncompleted fixed-price contracts as deferred revenue until such related services are provided. Deferred revenue was $0 and $48,130 at December 31, 2016 and 2015 respectively. Revenue on leased aircraft and equipment representing rental fees and financing charges are recorded on a straight line basis over the term of the leases. Currently, the Company’s consolidated revenues consist principally of revenues earned under aircraft management contracts (which are based on fixed expenses and fees plus variable expenses and fees tied to actual aircraft flight hours) and revenues earned from the provision of leased aircraft. |
Pre-contract Costs | Pre-contract Costs We capitalize the pre-contract costs we incur, excluding start-up costs which are expensed as incurred, if we determine that it is probable that we will be awarded a specific anticipated contract. These capitalized costs are recognized as a cost of revenue ratably across flight hours that are expected to be flown, as they are actually flown, for that particular contract. Capitalized pre-contract costs of $29,790 and $334,134 at December 31, 2016 and December 31, 2015, respectively, are included in other current assets in the accompanying consolidated balance sheets. Should future orders not materialize or we determine the costs are no longer probable of recovery, the capitalized costs would be written off. | |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of cash flow, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties, and highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash balances usually do exceed federally insured limits. | |
Restricted Cash | Restricted Cash The Company considers cash or highly liquid debt instruments on deposit with financial institutions that are held to secure an obligation by the Company to be restricted cash. As of December 31, 2016 and 2015, the Company had a restricted cash balance of $50,007 and $1,100,000 respectively. This balance consists of a certificate of deposit that secures the Company’s credit borrowings in the amount of $50,007 and $350,000 at December 31, 2016 and 2015, respectively, and a $750,000 certificate of deposit that secured a standby letter of credit in support of the Company’s response to a formal contract bid at December 31, 2015. | |
Standby Letters of Credit | Standby Letters of Credit As of December 31, 2015, the Company had deposited $750,000 into a certificate of deposit to secure a standby letter of credit in support of the Company’s response to a formal contract bid. The standby letter of credit was included in restricted cash and cancellable only by the beneficiary in certain circumstances, to draw drafts on the issuing bank up to the face amount of the standby letter of credit under the rules relating to the contact billing process in which the $750,000 served as a bid bond. On February 28, 2016, the Company was notified that the beneficiary was terminating contract negotiations and liquidating the bid bond. The Company retrospectively took a full reserve against the standby letter of credit for the full amount of the $750,000, which was included in accrued liabilities at December 31, 2015. | |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $29,302 and $37,369 allowance for doubtful accounts as of September 30, 2017 and December 31, 2016, respectively. In June 2016, the Company entered a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately $2.0 million of receivables has been sold under the factoring agreement during fiscal year 2016 and the first, second and third quarters of 2017. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of ASC 860, “Transfers and Servicing” (“ASC 860”). The amount due from the factoring company, net of advances received from the factoring company, was $0 at September 30, 2017. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in the Other Income / Expense in the Consolidated Statement of Operations. In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. Amounts receivables from customers are offset against the customer deposit upon termination of the contract, if the contract permits offsetting. As of September 30, 2017, and December 31, 2016, the Company held $688,275 and $165,094, respectively, in customer deposits, net. | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company has established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other relevant information. Management believes that its contract acceptance, billing and collection policies are adequate to minimize the potential credit risk associated with accounts receivable. The Company had $37,369 and $14,600 recorded as allowance for doubtful accounts as of December 31, 2016 and 2015, respectively. In June 2016, the Company entered into a factoring agreement to sell without recourse, certain U.S. government contract receivables to an unrelated third-party financial institution. Under the current terms of the factoring agreement, the maximum amount of outstanding advances at any one time is $1.0 million. The discount rate included in the agreement was subject to change based on the historical performance of the receivables sold. Approximately $1.5 million of receivables have been sold under the terms of the factoring agreement during fiscal year 2016. The sale of these receivables accelerated the collection of the Company’s cash and reduced credit exposure during the year. Sales of accounts receivable are reflected as a reduction of Accounts receivable trade, net in the Consolidated Balance Sheets, and any costs incurred by the Company associated with the factoring activity is reflected in Other Income / Expense in the Consolidated Statements of Operations, as they meet the applicable criteria of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities” (“SFAS No. 140”). The amount due from the factoring companies, net of advances received from the factoring companies, was approximately $42,000 at December 31, 2016. The Company pays factoring fees associated with the sale of receivables based on the dollar value of the receivables sold. Such fees are immaterial and are included in Other Income / Expense in the Consolidated Statements of Operations. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost, less accumulated depreciation, and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives, ranging from 3-5 years of respective assets. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in the statement of operations. | Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs, including replacement of minor items of physical properties, are charged to expense; major additions to physical properties are capitalized. It is the Company’s policy to commence depreciation upon the date that assets are placed into service. The Company recognized depreciation expense of $234,663 and $14,447 for the years ended December 31, 2016 and 2015, respectively. Depreciation is computed on a straight-line basis over the estimated service lives of the assets as follows: Years Computer equipment 3-5 Furniture and fixtures 3-5 Aircraft under capital lease 30 |
Intangibles | Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, Federal Aviation Administration (the “FAA”) licenses and independent research and development costs associated with the development of supplemental type certificates (“STCs”). STCs are authorizations granted by the FAA for specific modifications of a certain aircraft. An STC authorizes us to perform modifications, installations, and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of September 30, 2017 and 2016 we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulations (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite-lived. It is the Company’s policy to commence amortization of computer software upon the date that assets are placed into service. Amortization is computed on a straight-line basis over a 3-year life. | Intangibles Intangibles are stated at cost, less accumulated amortization. Intangibles consist of computer software, FAA licenses as well as independent research and development costs associated with the development of supplemental type certificates (“STCs”). STC’s are authorizations granted by the FAA for specific modifications of certain aircraft. An STC authorizes us to perform modifications, installations and assemblies on applicable customer-owned aircraft. Costs incurred to obtain STC’s are capitalized and subsequently amortized against revenue being generated from aircraft modifications associated with the STC. The costs are expensed as services are rendered on each aircraft through cost of sales using the units of production method. The legal life of an STC is indefinite. We believe we have enough future sales to fully amortize our STC development costs. As of December 31, 2016 and 2015, we have recognized no amortization of these costs. On October 1, 2015, the Company purchased Proflight Aviation Services, LLC, which provides flight training services under a Federal Aviation Regulation (“FAR”) Part 141 certificate. The total purchase price of $50,000 was allocated to intangibles and is considered to be indefinite lived. On March 15, 2016, the Company purchased Tempus Jets, Inc. (“TJI”) from our CEO Benjamin Scott Terry for non-cash consideration of $500,000, paid in the form of 242,131 shares of common stock of the Company. TJI owns an operating certificate issued by the FAA in accordance with the requirements of Parts 119 and 135 of the FAR (the “Operating Certificate”). The total purchase price of $500,000 was allocated to intangibles and is considered to be indefinite-lived. The Company has filed an election under I.R.C Section 338(h)(10) to treat this qualified acquisition of stock as an acquisition of assets for tax purposes. The Company disposed of TJI effective January 1, 2017. See Note 18, Subsequent Events, below. It is the Company’s policy to commence amortization of software upon the date that assets are placed into service. The Company recognized computer software amortization expense of $27,755 and $8,582 for the years ended December 31, 2016 and 2015, respectively. Amortization is computed on a straight-line basis over the estimated service lives of the assets as follows: Years Computer software 3 |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. | Long-Lived Assets The Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. As a result of its review, the Company does not believe that any such change has occurred. If such changes in circumstance are present, a loss is recognized to the extent the carrying value of the asset is in excess of the fair value of cash flows expected to result from the sale of the asset and amounts expected to be realized upon its eventual disposition. |
Customer Deposits | Customer Deposits In the normal course of business, the Company receives cash as security for certain contractual obligations, which are held on deposit until termination of the contract. Customer deposits are returned to the customer at contract termination or taken into income if the customer fails to perform under the contract. At December 31, 2016 and 2015, the Company held $278,945 and $754,545, respectively, in customer deposits. | |
Sales and Marketing | Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and Marketing expense was $144,007 and $620,829 for the nine months ended September 30, 2017 and 2016, respectively. | Sales and Marketing The Company records costs for general advertising, promotion and marketing programs at the time those costs are incurred. Sales and marketing expense was $765,434 and $626,569 for years ended December 31, 2016 and 2015, respectively. |
Inventory | Inventory The Company values its inventory at the lower of average cost, first-in-first-out (“FIFO”) or net realizable value. Any identified excess, slow moving, and obsolete inventory is written down to its market value through a charge to income from operations. There was $0 and $24,999 in inventory recorded at December 31, 2016 and 2015, respectively. | |
Stock Based Compensation | Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation expense is recognized on a straight-line basis over the requisite service period. | Stock Based Compensation The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based upon fair value at the date of award using a fair value based option pricing model. The compensation is recognized on a straight-line basis over a requisite service period. |
Foreign Currency Translation | Foreign Currency Translation The measurement currency of the Company is the U.S. Dollar. Transactions in foreign currencies are translated at the exchange rate in effect at the transaction date. Monetary assets and liabilities denominated in other than the measurement currency, if any, are translated at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in earnings. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities that are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. | Fair Value of Financial Instruments The Company complies with ASC Topics 820, “Fair Value Measurement”, and 815, “Derivatives and Hedging” for its liabilities, which are re-measured and reported at fair value for each reporting period. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, approximates the carrying amounts represented in the accompanying consolidated balance sheets. |
Net Earnings (Loss) per Share | Net Earnings (Loss) per Share Basic and diluted net loss per share information is presented under the requirements of ASC Topic 260, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, warrants and convertible notes in the weighted-average number of common shares outstanding for a period, if dilutive. As the Company has incurred losses for the nine months ended September 30, 2017 and 2016, the potentially dilutive shares are anti-dilutive and are thus not added into the loss per share calculations. For the nine months ended September 30, 2017 and 2016, there were 13,428,930 and 10,024,972 weighted average shares outstanding, respectively. | |
Reclassification | Reclassification Prior period accounts receivable from related parties of $396,986 were reclassified and netted against prior period accounts payable to related parties of $1,886,386. The balance of accounts payables to related parties after the reclassification is $1,489,400 as per December 31, 2016. Certain other prior period amounts have been reclassified to conform to the current period presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. | Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying consolidated financial statements. These reclassifications had no material effect on the previously reported results of operations or accumulated deficit. |
Correction of an Error | Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended September 30, 2016. The error was not material to the unaudited consolidated financial statements for the nine months period ended September 30, 2016 since the correction of the error increased assets and liabilities by the same amount. | Correction of an Error The Company determined that it had been accounting for a lease agreement and its purchase obligation related to an aircraft in error. The Company should have accounted for its purchase obligation as a capital lease, thereby recording a capital lease aircraft asset and a corresponding capital lease liability of approximately $6,000,000 as of the end of the quarter ended March 31, 2016. The error was not material to the unaudited consolidated financial statements for the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016 since the correction of this error increased assets and liabilities by the same amount. |
Subsequent Events | Subsequent Events In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the issuance of the consolidated financial statements. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the update, revenue will be recognized based on a five-step model. The core principle of the model is that revenue will be recognized when the transfer of promised goods or services to customers is made in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In the third quarter of 2015, the FASB deferred the effective date of the standard to annual and interim periods beginning after December 15, 2017. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, and provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. Until the issuance of this ASU, U.S. GAAP lacked guidance about management’s responsibility to evaluate whether there is substantial doubt about the organization’s ability to continue as a going concern or to provide related footnote disclosures. The amendments are effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016, with early adoption permitted. The Company has concluded that there is substantial doubt about its ability to continue as a going concern and has presented the required disclosures of this ASU in Note 2. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). Under the update, an acquirer in a business combination is no longer required to account for measurement-period adjustments retrospectively, and, instead, will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment. The ASU is effective for financial statements issued after December 15, 2017, and interim periods within those years. Early adoption will be permitted for annual and interim periods beginning after December 15, 2016. The Company does not expect the impact of adopting this ASU to be material to the Company's financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. Under the update, deferred taxes would be classified as noncurrent in the statement of financial position instead of being separated into current and non-current amounts. The ASU is effective for financial statements issued after January 1, 2017 with early adoption permitted. Additionally, the Company may apply the standard either prospectively or retrospectively. The Company is currently evaluating the impact that adopting this ASU will have on its financial position, results of operations and cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires the lessee to recognize assets and liabilities for leases with lease terms of more than twelve months. For leases with a term of twelve months or less, the Company is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. Further, the lease requires a finance lease to recognize both an interest expense and an amortization of the associated expense. Operating leases generally recognize the associated expense on a straight line basis. ASU 2016-02 requires the Company to adopt the standard using a modified retrospective approach and adoption beginning on January 1, 2019. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial position, results of operations and cash flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). The update amends the guidelines for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual and interim periods beginning January 1, 2017, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-09 will have on its consolidated financial position, results of operations and cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash. The ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is for entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years using a retrospective transition method to each period presented. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-18 will have on its financial position, results of operations and cash flows. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption. |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of asset estimated service life | Years Computer equipment 3-5 Furniture and fixtures 3-5 Aircraft under capital lease 30 |
Schedule of intangible asset estimated service lives | Years Computer software 3 |
Stock Options_Stock Based Com31
Stock Options/Stock Based Compensation (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Stock Options/Stock Based Compensation [Abstract] | ||
Schedule of the Black-Scholes option-pricing model to value the options | Shares Weighted Options outstanding, December 31, 2016 322,000 $ 2.05 Granted to employees and non-employee directors - - Exercised - - Canceled/expired/forfeited 196,000 - Options outstanding, September 30, 2017 126,000 2.05 Options exercisable, September 30, 2017 - $ - | Shares Weighted Average Exercise Price Per Option Options outstanding, December 31, 2015 - $ - Granted to employees and non-employee directors 499,000 2.05 Exercised - - Canceled/expired/forfeited 177,000 - Options outstanding, December 31, 2016 322,000 2.05 Options exercisable, December 31, 2016 - $ - |
Customer and Vendor Concentra32
Customer and Vendor Concentration (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Customer and Vendor Concentration [Abstract] | |
Schedules of customer concentration of risk | For the years ended December 31 2016 Revenue 2015 Revenue Customer A $ 4,315,189 23 % $ 4,094,994 34 % Customer B 5,923,565 32 % 6,424,766 54 % Customer C 2,783,292 15 % - 0 % Other customers 5,753,909 30 % 1,413,673 12 % $ 18,775,955 100 % $ 11,933,433 100 % December 31, 2016 December 31, 2015 Accounts Receivable Accounts Receivable Customer A $ 387,729 27 % $ 392,453 46 % Customer B 449,658 32 % 442,885 52 % Customer C 42,624 3 % - 0 % Other customers 535,072 38 % 20,625 2 % $ 1,415,083 100 % $ 855,963 100 % |
Schedule of vendor concentration risk | For the years ended December 31 2016 Cost of Revenue 2015 Cost of Revenue Vendor A $ 3,484,433 18 % $ 2,848,715 25 % Vendor B 2,172,579 12 % 1,106,927 10 % Vendor C 1,530,233 8 % 998,787 8 % Other 11,896,589 62 % 6,513,581 57 % $ 19,083,834 100 % $ 11,468,010 100 % December 31, 2016 December 31, 2015 Accounts Payable Accounts Payable Vendor A $ 304,826 8 % $ 195,511 20 % Vendor B 235,388 6 % 33,270 3 % Vendor C 18,616 1 % 91,355 9 % Other vendors 3,222,457 85 % 674,969 68 % $ 3,781,287 100 % $ 995,105 100 % |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
Schedule of other assets | December 31, December 31, 2016 2015 Pre-contract costs $ 49,799 $ 334,134 Other prepaid expenses 49,072 38,940 Total $ 98,871 $ 373,074 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Measurements [Abstract] | ||
Schedule of fair value assets and liabilities | December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - September 30, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 118,125 $ 118,125 $ - $ - Series A Warrant Liability 9,010 - 9,010 - Total Warrant Liability $ 127,135 $ 118,125 $ 9,010 $ - | December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 78,750 $ 78,750 $ - $ - Series A Warrant Liability 23,435 - 23,435 - Series B Warrant Liability - - - - Total Warrant Liability $ 102,185 $ 78,750 $ 23,435 $ - December 31, Quoted Prices In Active Markets Significant Other Observable Inputs Significant Other Unobservable Inputs Description 2015 (Level 1) (Level 2) (Level 3) Liabilities: IPO and Placement Warrant Liability $ 1,575,000 $ 1,575,000 $ - $ - Series A Warrant Liability 4,215,600 - 4,215,600 - Series B Warrant Liability 5,452,200 - 5,452,200 - Total Warrant Liability $ 11,242,800 $ 1,575,000 $ 9,667,800 $ - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property and Equipment, Net [Abstract] | ||
Schedule of property and equipment, net | September 30, December 31, 2017 2016 Office equipment $ 135,897 $ 167,088 Furniture and fixtures 456 456 Aircraft 6,015,505 6,015,505 Total 6,151,858 6,183,049 Accumulated depreciation (424,531 ) (249,109 ) Property and equipment, net $ 5,727,327 $ 5,933,940 | December 31, December 31, 2016 2015 Office equipment $ 168,055 $ 131,389 Furniture and fixtures 456 456 Leased Aircraft 6,015,505 - Total 6,184,016 131,845 Accumulated depreciation (249,109 ) (14,447 ) Property and equipment, net $ 5,934,907 $ 117,398 |
Intangibles, Net (Tables)
Intangibles, Net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Intangibles, Net [Abstract] | ||
Schedule of intangibles, net | September 30, December 31, 2017 2016 Infinite-lived intangible assets: FAA license $ 50,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 455,901 Accumulated amortization - - 455,901 455,901 Software 85,275 85,275 Accumulated amortization (55,648 ) (36,337 ) 29,627 48,938 Total intangible assets, net $ 535,528 $ 554,839 | December 31, December 31, 2016 2015 Indefinite-lived intangible assets: FAA licenses $ 550,000 $ 50,000 Finite-lived intangible assets: STC costs 455,901 414,226 Accumulated amortization - - 455,901 414,226 Software 85,275 82,240 Accumulated amortization (36,337 ) (8,582 ) 48,938 73,658 Total intangible assets, net $ 1,054,839 $ 537,884 |
Schedule of STC estimated amortization | Estimated STC Amortization 2017 $18,236 2018 45,590 2019 136,770 2020 255,305 Total $455,901 | |
Schedule of software amortization | Software Amortization 2017 $28,425 2018 19,843 2019 670 Total $48,938 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Schedule of accrued liabilities | December 31, December 31, 2016 2015 Reserve for standby letter of credit $ - $ 750,000 Accrued employment costs 380,903 185,567 Aircraft maintenance reserves 37,050 110,000 Board fees 104,833 34,833 Other 389,528 233,570 Total $ 912,314 $ 1,313,970 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Warrants [Abstract] | |
Schedule of warrants issued and outstanding | Security Quantity Strike Price IPO & Placement Warrants 7,875,000 $ 11.50 Series A Warrants 3,187,500 $ 4.80 Series B Warrants - $ 5.00 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes [Abstract] | |
Schedule of income tax benefit | 2016 2015 Federal income tax rate 34 % 34 % Income tax benefit at the federal statutory rate $ (1,062,864 ) $ (2,558,779 ) State benefit, net of federal benefit (203,126 ) (176,615 ) Permanent differences net (663,707 ) 1,057,550 Tax attributes from business combination - (434,725 ) Changes in valuation allowances 1,324,427 2,112,569 Prior period true-up 605,270 Income tax (benefit) provision $ - $ - |
Schedule of deferred tax assets and liabilities | 2016 2015 Deferred tax assets: Accounts receivable $ 14,200 $ 5,548 Other reserves 26,344 7,554 Stock based compensation 57,437 - Standby letter of credit reserve - 285,000 Start-up costs 356,646 382,902 Net operating loss carryforwards 3,024,924 1,474,121 Total deferred tax assets 3,479,551 2,155,125 Less: valuation allowances (3,479,551 ) (2,155,125 ) Net deferred tax assets $ - $ - |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combination [Abstract] | |
Schedule of assets acquired and the liabilities assumed in the business combination | As Recorded by Chart Acquisition Corp. Adjustments As Recorded Assets Cash and cash equivalents $ 4,128,746 (C) $ - $ 4,128,746 Due from Sponsor 660 (B) - 660 Total assets 4,129,406 - 4,129,406 Liabilities Accounts payable $ 100,027 (B) $ - $ 100,027 Payable to affiliates of the Sponsor 6,614 (B) - 6,614 Accrued expenses 25,000 (B) - 25,000 Warrant liability 1,808,176 (336,276 )(A) 1,471,900 Total liabilities 1,939,817 (336,276 ) 1,603,541 Net assets acquired over liabilities assumed $ 2,189,589 $ 2,525,865 (A) Based on the valuation report of the Valuation Firm, (see Note 11 above) valuing the warrants as of July 31, 2015, the date of the Business Combination, the warrant liability carried on the balance sheet of Chart has been adjusted to the value calculated by the Valuation Firm. (B) As part of the Business Combination, Tempus assumed the working capital (liabilities) of Chart, net of cash and warrant liability, in the amount of ($130,981). Please see the consolidated statements of cash flows. (C) Pursuant to the Business Combination and the Financing, the Company received $16,000,000 in cash related to the sale of common stock, preferred stock and warrants. The use of the proceeds is summarized as follows: |
Summary of net cash proceeds related to business combination | Sale of common stock, preferred stock and warrants pursuant to the Business Combination and Financing $ 16,000,000 Payment of costs related to the Business Combination and Financing (12,214,875 ) Cash from business acquired pursuant to the Business Combination 212,640 Net cash proceeds related to Business Combination $ 3,997,765 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations [Abstract] | |
Schedule of components of assets and liabilities and consolidated statements of operations and comprehensive loss classified as discontinued operations | September 30, December 31, 2017 2016 Current assets of discontinued operations $ 5,223 $ 65 Noncurrent assets of discontinued operations $ 0 $ 501,711 Current liabilities of discontinued operations $ 2,799 $ 569,937 Net assets of discontinued operations $ 2,424 $ (68,161 ) Nine months ended Three months ended September 30 September 30 2017 2016 2017 2016 Revenue - $ 1,256,881 - $ 668,150 Gross profit - (960,075 ) - (279,179 ) Selling, general and administrative expenses - (261,998 ) - (111,250 ) Depreciation and amortization - (1,472 ) - (770 ) Net loss from discontinued operations - $ (1,223,545 ) - $ (391,199 ) |
Description of Organization a42
Description of Organization and Business Operations (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Chief Financial Officer [Member] | |
Description of Organization and Business Operations (Textual) | |
Business combination transactions amount | $ 500,000 |
Investor [Member] | |
Description of Organization and Business Operations (Textual) | |
Business combination transactions amount | 10,500,000 |
Mr. Joseph Wright [Member] | |
Description of Organization and Business Operations (Textual) | |
Business combination transactions amount | $ 5,000,000 |
Going Concern (Details)
Going Concern (Details) $ in Millions | Dec. 31, 2016USD ($) |
Going Concern (Textual) | |
Purchase obligation related to an aircraft | $ 5.5 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Computer equipment [Member] | Minimum [Member] | |
Summary of estimated service live of assets [Abstract] | |
Property and equipment useful life | 3 years |
Computer equipment [Member] | Maximum [Member] | |
Summary of estimated service live of assets [Abstract] | |
Property and equipment useful life | 5 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Summary of estimated service live of assets [Abstract] | |
Property and equipment useful life | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Summary of estimated service live of assets [Abstract] | |
Property and equipment useful life | 5 years |
Aircraft under capital lease [Member] | |
Summary of estimated service live of assets [Abstract] | |
Property and equipment useful life | 30 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Computer software | 3 years |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details Textual) - USD ($) | Mar. 15, 2016 | Oct. 01, 2015 | Jun. 30, 2016 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies [Textual] | ||||||||||
Net operating loss carryforwards | More than 50%. | |||||||||
Deferred revenue | $ 48,130 | |||||||||
Capitalized pre-contract costs | 29,790 | 334,134 | ||||||||
Restricted cash | 50,007 | 1,100,000 | ||||||||
Certificate of deposit, credit card borrowings | 50,007 | 350,000 | ||||||||
Deposits | 750,000 | |||||||||
Certificate of deposit, standby letter of credit | 750,000 | |||||||||
Accrued liabilities | 750,000 | |||||||||
Allowance for doubtful accounts | $ 29,302 | $ 29,302 | 37,369 | 14,600 | ||||||
Outstanding advances | $ 1,000,000 | |||||||||
Sale of receivables | 1,500,000 | |||||||||
Advances received, net | 42,000 | |||||||||
Depreciation expense | 234,663 | $ 14,447 | ||||||||
Total purchase price | $ 50,000 | $ 500,000 | ||||||||
Common stock of shares | 17,805,234 | 17,805,234 | 11,064,664 | 8,836,421 | ||||||
Recognized amortization expense of computer software | $ 27,755 | $ 8,582 | ||||||||
Customer deposits | $ 688,275 | $ 688,275 | 165,094 | 754,545 | ||||||
Sales and marketing expense | 144,007 | $ 620,829 | 765,434 | 626,569 | ||||||
Inventory | 24,999 | |||||||||
Capital lease liability | $ 6,000,000 | $ 6,000,000 | ||||||||
Amortization computed term | Amortization is computed on a straight-line basis over a 3-year life. | |||||||||
Weighted average shares outstanding | 17,707,136 | 11,064,664 | 13,428,930 | 10,024,972 | ||||||
Capital lease liability | 6,015,505 | |||||||||
Prior accounts receivable from related parties | $ 396,986 | $ 396,986 | ||||||||
Prior period accounts payable to related parties | 1,886,386 | 1,886,386 | ||||||||
Accounts payables to related parties after reclassification | 949,112 | 949,112 | 1,489,400 | $ 331,337 | ||||||
Factoring Agreement [Member] | ||||||||||
Summary of Significant Accounting Policies [Textual] | ||||||||||
Outstanding advances | $ 1,000,000 | |||||||||
Customer deposits | 165,094 | |||||||||
Net advances received | 0 | $ 0 | ||||||||
Receivables sold | $ 2,000,000 | $ 2,000,000 | $ 2,000,000 | |||||||
Minimum [Member] | Property and Equipment [Member] | ||||||||||
Summary of Significant Accounting Policies [Textual] | ||||||||||
Property and equipment useful life | 3 years | |||||||||
Maximum [Member] | Property and Equipment [Member] | ||||||||||
Summary of Significant Accounting Policies [Textual] | ||||||||||
Property and equipment useful life | 5 years | |||||||||
Chief Executive Officer [Member] | ||||||||||
Summary of Significant Accounting Policies [Textual] | ||||||||||
Total purchase price | $ 500,000 | |||||||||
Non-cash consideration | $ 500,000 | |||||||||
Common stock of shares | 242,131 |
Customer and Vendor Concentra47
Customer and Vendor Concentration (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of customer concentration of risk | ||||||
Revenue | $ 3,195,822 | $ 3,741,639 | $ 11,655,027 | $ 12,335,250 | $ 18,775,955 | $ 11,933,433 |
Accounts Receivable | 1,500,000 | |||||
Revenue [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Revenue | $ 18,775,955 | $ 11,933,433 | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
Revenue [Member] | Customer A [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Revenue | $ 4,315,189 | $ 4,094,994 | ||||
Concentration risk, percentage | 23.00% | 34.00% | ||||
Revenue [Member] | Customer B [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Revenue | $ 5,923,565 | $ 6,424,766 | ||||
Concentration risk, percentage | 32.00% | 54.00% | ||||
Revenue [Member] | Customer C [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Revenue | $ 2,783,292 | |||||
Concentration risk, percentage | 15.00% | 0.00% | ||||
Revenue [Member] | Other customers [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Revenue | $ 5,753,909 | $ 1,413,673 | ||||
Concentration risk, percentage | 30.00% | 12.00% | ||||
Accounts Receivable [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Accounts Receivable | $ 1,415,083 | $ 855,963 | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
Accounts Receivable [Member] | Customer A [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Accounts Receivable | $ 387,729 | $ 392,453 | ||||
Concentration risk, percentage | 27.00% | 46.00% | ||||
Accounts Receivable [Member] | Customer B [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Accounts Receivable | $ 449,658 | $ 442,885 | ||||
Concentration risk, percentage | 32.00% | 52.00% | ||||
Accounts Receivable [Member] | Customer C [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Accounts Receivable | $ 42,624 | |||||
Concentration risk, percentage | 3.00% | 0.00% | ||||
Accounts Receivable [Member] | Other customers [Member] | ||||||
Schedule of customer concentration of risk | ||||||
Accounts Receivable | $ 535,072 | $ 20,625 | ||||
Concentration risk, percentage | 38.00% | 2.00% |
Customer and Vendor Concentra48
Customer and Vendor Concentration (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 2,816,231 | $ 3,456,863 | $ 9,645,159 | $ 12,072,877 | $ 19,083,834 | $ 11,468,010 |
Accounts Payable [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Accounts Payable | $ 3,781,287 | $ 995,105 | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
Vendor A [Member] | Accounts Payable [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Accounts Payable | $ 304,826 | $ 195,511 | ||||
Concentration risk, percentage | 8.00% | 20.00% | ||||
Vendor B [Member] | Accounts Payable [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Accounts Payable | $ 235,388 | $ 33,270 | ||||
Concentration risk, percentage | 6.00% | 3.00% | ||||
Vendor C [Member] | Accounts Payable [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Accounts Payable | $ 18,616 | $ 91,355 | ||||
Concentration risk, percentage | 1.00% | 9.00% | ||||
Other vendor [Member] | Accounts Payable [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Accounts Payable | $ 3,222,457 | $ 674,969 | ||||
Concentration risk, percentage | 85.00% | 68.00% | ||||
Cost of Revenue [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 19,083,834 | $ 11,468,010 | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||||
Cost of Revenue [Member] | Vendor A [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 3,484,433 | $ 2,848,715 | ||||
Concentration risk, percentage | 18.00% | 25.00% | ||||
Cost of Revenue [Member] | Vendor B [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 2,172,579 | $ 1,106,927 | ||||
Concentration risk, percentage | 12.00% | 10.00% | ||||
Cost of Revenue [Member] | Vendor C [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 1,530,233 | $ 998,787 | ||||
Concentration risk, percentage | 8.00% | 8.00% | ||||
Cost of Revenue [Member] | Other vendor [Member] | ||||||
Schedule of vendor concentration risk | ||||||
Cost of Revenue | $ 11,896,589 | $ 6,513,581 | ||||
Concentration risk, percentage | 62.00% | 57.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes [Abstract] | ||
Federal income tax rate | 34.00% | 34.00% |
Income tax benefit at the federal statutory rate | $ (1,062,864) | $ (2,558,779) |
State benefit, net of federal benefit | (203,126) | (176,615) |
Permanent differences net | (663,707) | 1,057,550 |
Tax attributes from business combination | (434,725) | |
Changes in valuation allowances | 1,324,427 | 2,112,569 |
Prior period true-up | 605,270 | |
Income tax (benefit) provision |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Accounts receivable | $ 14,200 | $ 5,548 |
Other reserves | 26,344 | 7,554 |
Stock based compensation | 57,437 | |
Standby letter of credit reserve | 285,000 | |
Start-up costs | 356,646 | 382,902 |
Net operating loss carryforwards | 3,024,924 | 1,474,121 |
Total deferred tax assets | 3,479,551 | 2,155,125 |
Less: valuation allowances | (3,479,551) | (2,155,125) |
Net deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income Taxes (Textual) | |
Federal net operating losses carryforwards | $ 8,000,000 |
State net operating losses carryforward | $ 8,000,000 |
Operating loss carryforwards, expiration date | Dec. 31, 2036 |
Income tax benefits, description | Greater than 50%. |
Net operating loss carryforwards | More than 50%. |
Income tax examination, term | 3 Years |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | Jan. 22, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 14, 2017 | Jun. 24, 2016 | Mar. 15, 2016 | Feb. 29, 2016 | Feb. 24, 2016 | Feb. 03, 2016 |
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares issued | 0 | 4,578,070 | 1,369,735 | |||||||
Conversion price per share | $ 0.08 | |||||||||
Preferred stock, value issued | $ 458 | $ 137 | ||||||||
Common stock, shares issued | 17,805,234 | 11,064,664 | 8,836,421 | |||||||
Preferred stock, shares outstanding | 0 | 4,578,070 | 1,369,735 | |||||||
Common stock, shares outstanding | 17,805,234 | 11,064,664 | 8,836,421 | |||||||
Stock price per share | $ 2.05 | |||||||||
Common stock, value issued | $ 1,781 | $ 1,106 | $ 884 | |||||||
Conversion of shares issued | 4,578,070 | |||||||||
Warrants outstanding | $ 7,875,000 | |||||||||
Preferred stock, shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | |||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||||
Preferred Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares issued | 0 | |||||||||
Conversion price per share | $ 4 | |||||||||
Preferred Stock, per share | $ 4 | |||||||||
Preferred stock, shares outstanding | 0 | |||||||||
Conversion of shares issued | 4,578,070 | |||||||||
Common Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Outstanding warrants exercisable shares | 7,875,000 | 7,875,000 | 7,875,000 | |||||||
Conversion price per share | $ 4 | |||||||||
Common stock, shares issued | 17,805,234 | |||||||||
Preferred stock convertible into common stock shares | 4,578,070 | 1,369,735 | ||||||||
Common stock, shares outstanding | 17,805,234 | |||||||||
Business combination description | (i) adjustments to the merger consideration payable to the Members as a result of Tempus’ working capital and/or debt as of the completion of the Business Combination varying from the estimates that were made at the time of the consummation of the Business Combination, (ii) Tempus meeting certain financial milestones pursuant to the earn-out provisions of the Merger Agreement, up to a total of 6,300,000 shares and (iii) any indemnification payments that are made under the Merger Agreement by delivery of shares of common stock. The shares of common stock issued to the Members under Merger Agreement are subject to certain lock-up restrictions as set forth in the Tempus Registration Right Agreement to which the Members are subject. Additionally, we may issue awards for up to a maximum of 640,616 shares of common stock under our 2015 Omnibus Equity Incentive Plan. | |||||||||
Market price description | (i) July 31, 2016 or earlier if the last sales price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after July 31, 2015, or (ii) the date on which we consummate a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. In addition, 234,375 Founder Shares are subject to forfeiture pro rata by Chart's initial stockholders in the event the last sales price of our common stock does not equal or exceed $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within 60 months following July 31, 2015. An additional 234,375 Founder Shares, will be subject to forfeiture pro rata by Chart's initial stockholders in the event the last sales price of our common stock does not equal or exceed $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period prior to July 31, 2020. | |||||||||
Conversion of shares issued | 4,578,070 | |||||||||
Chief Executive Officer [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Common stock, shares issued | 242,131 | |||||||||
Common stock, value issued | $ 500,000 | |||||||||
Employee Stock Option [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Minimum vesting period | 3 years | |||||||||
Purchase of common stock | $ 499,000 | |||||||||
Maximum [Member] | Preferred Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock description | The holder would beneficially own in excess of either 4.99% or 9.99% (the "Maximum Percentage") | |||||||||
Percentage of issued and outstanding preferred stock | 4.99% | |||||||||
Series A Warrant [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares outstanding | 2,200,000 | |||||||||
Conversion of shares issued | 2,162,500 | |||||||||
Warrants conversion price | $ 0.08 | |||||||||
Warrants outstanding | $ 3,187,500 | $ 3,187,500 | ||||||||
Series A Warrant [Member] | Preferred Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares issued | 3,187,500 | 3,187,500 | ||||||||
Preferred stock, shares outstanding | 3,187,500 | |||||||||
Series A Warrant [Member] | Common Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Outstanding warrants exercisable shares | 1,025,000 | 3,187,500 | 3,187,500 | |||||||
Common stock, shares issued | 1,175,000 | |||||||||
Series B Warrant [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Market price description | On October 31, 2016 or April 30, 2017, as applicable, if 90% of the average of the four lowest volume-weighted average prices of common stock for the preceding 10 trading days (the "Alternative Market Price") is less than $4.00 (subject an Alternative Market Price floor of $1.80), the holder of a Series B Warrant can exercise such Series B Warrant to acquire on a cashless basis a number of shares of common stock or Preferred Stock equal to (depending on the Market Price) up to 488.9% of the number of shares that could otherwise be purchased under such Series B Warrant pursuant to a cash exercise, with the lower the Alternative Market Price, the more shares being available for acquisition by the Series B Warrant holder pursuant to this alternative cashless exercise. | |||||||||
Warrants outstanding | $ 0 | $ 1,062,500 | ||||||||
Series B Warrant [Member] | Preferred Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares issued | 1,062,500 | |||||||||
Maximum shares of cashless exercise feature | 5,194,449 | |||||||||
Preferred stock, shares outstanding | 1,062,500 | |||||||||
Series B Warrant [Member] | Common Stock [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Outstanding warrants exercisable shares | 1,062,500 | |||||||||
Series B-1 Warrants [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Preferred stock, shares issued | 1,527,778 | 1,680,557 | ||||||||
Preferred stock, value issued | $ 2,979,167 | $ 3,361,114 | ||||||||
Series B-2 Warrants and Series B-3 Warrants [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Common stock, shares issued | 1,344,446 | 641,666 | ||||||||
Common stock, value issued | $ 1,546,113 | $ 1,251,249 | ||||||||
IPO and Placement Warrants [Member] | ||||||||||
Stockholders' Equity (Textual) | ||||||||||
Stock price per share | $ 17.50 | |||||||||
Warrants outstanding | $ 7,875,000 |
Stock Options_Stock Based Com53
Stock Options/Stock Based Compensation (Details) - Employee and Non Employee Stock Option [Member] - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Schedule of stock option activity | |||
Options outstanding, Beginning balance | 322,000 | ||
Granted, shares | 499,000 | 499,000 | |
Exercised, shares | |||
Canceled/expired/forfeited, shares | 196,000 | 177,000 | |
Options outstanding, Ending balance | 126,000 | 322,000 | |
Option exercisable | |||
Options outstanding, Beginning balance, Weighted Average Exercise Price Per Option | $ 2.05 | ||
Granted, Weighted Average Exercise Price Per Option | 2.05 | ||
Exercised, Weighted Average Exercise Price Per Option | |||
Canceled/expired/forfeited, Weighted Average Exercise Price Per Option | |||
Options outstanding, Ending balance, Weighted Average Exercise Price Per Option | 2.05 | 2.05 | |
Options exercisable, Weighted Average Exercise Price Per Option |
Stock Options_Stock Based Com54
Stock Options/Stock Based Compensation (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options (Textual) | ||||
Stock-based compensation | $ 44,360 | $ 175,677 | $ 151,150 | |
Risk-free interest rate | 1.77% | 1.77% | ||
Volatility | 60.00% | 60.00% | ||
Dividend payout | $ 0 | $ 0 | ||
Unrecognized compensation cost | $ 73,932 | $ 527,032 | ||
Stock Option [Member] | ||||
Stock Options (Textual) | ||||
Granted to employees and non-employee directors, shares | 499,000 | 499,000 | ||
Stock-based compensation | $ 151,150 | $ 0 | ||
Purchase of common stock | 126,000 | 322,000 | 0 | |
Unrecognized compensation cost | $ 302,301 |
Other Assets (Details)
Other Assets (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Other Assets [Abstract] | ||
Pre-contract costs | $ 49,799 | $ 334,134 |
Other prepaid expenses | 49,072 | 38,940 |
Total | $ 98,871 | $ 373,074 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Apr. 28, 2017 | |
Convertible Debt (Textual) | ||
Convertible into common stock of shares | 77,500,000 | |
Share capital, percentage | 82.30% | |
Conversion price per share | $ 0.08 | |
Senior Secured Convertible Note [Member] | ||
Convertible Debt (Textual) | ||
Debt note purchase agreement interest | 10.00% | |
Aggregate principal amount | $ 6,200,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | $ 127,135 | $ 102,185 | $ 11,242,800 |
Series A Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 9,010 | 23,435 | 4,215,600 |
Series B Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 5,452,200 | ||
IPO and Placement Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 118,125 | 78,750 | 1,575,000 |
Quoted Prices In Active Markets (Level 1) [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 118,125 | 78,750 | 1,575,000 |
Quoted Prices In Active Markets (Level 1) [Member] | Series A Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Quoted Prices In Active Markets (Level 1) [Member] | Series B Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Quoted Prices In Active Markets (Level 1) [Member] | IPO and Placement Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 118,125 | 78,750 | 1,575,000 |
Significant Other Observable Inputs (Level 2) [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 9,010 | 23,435 | 9,667,800 |
Significant Other Observable Inputs (Level 2) [Member] | Series A Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 9,010 | 23,435 | 4,215,600 |
Significant Other Observable Inputs (Level 2) [Member] | Series B Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | 5,452,200 | ||
Significant Other Observable Inputs (Level 2) [Member] | IPO and Placement Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Significant Other Unobservable Inputs (Level 3) [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Significant Other Unobservable Inputs (Level 3) [Member] | Series A Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Significant Other Unobservable Inputs (Level 3) [Member] | Series B Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability | |||
Significant Other Unobservable Inputs (Level 3) [Member] | IPO and Placement Warrant Liability [Member] | |||
Schedule of fair value assets and liabilities | |||
Total Warrant Liability |
Fair Value Measurements (Deta58
Fair Value Measurements (Details Textual) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
IPO and Placement Warrant Liability [Member] | |||
Fair Value Measurements (Textual) | |||
Warrants price | $ 0.01 | $ 0.01 | $ 0.20 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of property and equipment, Net | |||
Total | $ 6,151,858 | $ 6,183,049 | $ 131,845 |
Accumulated depreciation | (424,531) | (249,109) | (14,447) |
Property and equipment, net | 5,727,327 | 5,933,940 | 117,398 |
Office equipment [Member] | |||
Schedule of property and equipment, Net | |||
Total | 135,897 | 167,088 | 131,389 |
Furniture and fixtures [Member] | |||
Schedule of property and equipment, Net | |||
Total | 456 | 456 | 456 |
Aircraft [Member] | |||
Schedule of property and equipment, Net | |||
Total | $ 6,015,505 | $ 6,015,505 |
Intangibles, Net (Details)
Intangibles, Net (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of intangibles, net | |||
Accumulated amortization | $ (27,755) | $ (8,582) | |
Total intangible assets, net | $ 535,528 | 554,839 | 537,884 |
STC costs [Member] | |||
Schedule of intangibles, net | |||
Total intangible assets | 455,901 | 455,901 | 414,226 |
Accumulated amortization | |||
Total intangible assets, net | 455,901 | 455,901 | 414,226 |
Software [Member] | |||
Schedule of intangibles, net | |||
Total intangible assets | 85,275 | 85,275 | 82,240 |
Accumulated amortization | (55,648) | (36,337) | (8,582) |
Total intangible assets, net | 29,627 | 48,938 | 73,658 |
FAA licenses [Member] | |||
Schedule of intangibles, net | |||
Indefinite-lived intangible assets | $ 50,000 | $ 50,000 | $ 50,000 |
Intangibles, Net (Details 1)
Intangibles, Net (Details 1) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of STC estimated amortization | |||
Total intangible assets, net | $ 535,528 | $ 554,839 | $ 537,884 |
Estimated STC Amortization [Member] | |||
Schedule of STC estimated amortization | |||
2,017 | 18,236 | ||
2,018 | 45,590 | ||
2,019 | 136,770 | ||
2,020 | 255,305 | ||
Total intangible assets, net | $ 455,901 |
Intangibles, Net (Details 2)
Intangibles, Net (Details 2) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of software amortization | |||
Total intangible assets, net | $ 535,528 | $ 554,839 | $ 537,884 |
Software Amortization [Member] | |||
Schedule of software amortization | |||
2,017 | 28,425 | ||
2,018 | 19,843 | ||
2,019 | 670 | ||
Total intangible assets, net | $ 29,627 | $ 48,938 | $ 73,658 |
Intangibles, Net (Details Textu
Intangibles, Net (Details Textual) - USD ($) | Oct. 01, 2015 | Sep. 30, 2017 | Dec. 31, 2016 |
Intangibles, Net (Textual) | |||
Purchase price | $ 50,000 | $ 500,000 | |
FAA licenses [Member] | |||
Intangibles, Net (Textual) | |||
Purchase price | $ 50,000 | $ 50,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Liabilities [Abstract] | |||
Reserve for standby letter of credit | $ 750,000 | ||
Accrued employment costs | 380,903 | 185,567 | |
Aircraft maintenance reserves | 37,050 | 110,000 | |
Board fees | 104,833 | 34,833 | |
Other | 389,528 | 233,570 | |
Total | $ 975,852 | $ 874,286 | $ 1,313,970 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Oct. 01, 2015 | Mar. 31, 2016 | Feb. 25, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Pilatus Business Aircraft, Ltd [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Purchase special mission modifications | $ 7,300,000 | |||||
Term of operating leases | 1 year | |||||
Lease due date | Apr. 28, 2018 | |||||
Customer deposits | $ 688,275 | $ 165,094 | 754,545 | |||
Employee agreements, description | The Company has employment agreements with certain executives with provisions for termination obligations in certain circumstances of up to 12 months' severance. The Company expects to pay total aggregate base compensation of approximately $350,000 annually through 2018, plus customary fringe benefits and bonuses. | |||||
Interest rate of lease agreement | 5.00% | |||||
CAF [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Currently hold in customer deposit | $ 750,000 | |||||
Customer deposits | 500,000 | |||||
Notes payable | 62,018 | 0 | ||||
Billing in support of CAF | 53,082 | 0 | ||||
Total purchases, value | $ 723,756 | 0 | ||||
San Marcos [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Lease expense | $ 10,500 | |||||
Term of operating leases | 15 months | 12 months | ||||
Lease due date | Jan. 1, 2017 | |||||
Lease monthly amount | $ 3,000 | |||||
Future minimum lease payments | $ 162,000 | |||||
Simulator lease extended | Dec. 31, 2016 | |||||
Real office and Hangar space [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Lease expense | $ 454,129 | 207,439 | ||||
Aircraft and simulators [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Lease expense | 5,407,873 | $ 3,232,229 | ||||
Hangar space [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Term of operating leases | 1 year | 6 months | ||||
Lease monthly amount | $ 2,000 | $ 16,673 | ||||
Future minimum lease payments | 0 | |||||
Unpaid lease | 14,000 | |||||
Hangar Space One [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Unpaid lease | $ 160,028 | |||||
Gulf Stream [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Term of operating leases | 40 months | |||||
Lease monthly amount | $ 70,000 | |||||
Aircraft [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Term of operating leases | 1 year | |||||
Lease due date | Feb. 28, 2016 | |||||
Purchase special mission modifications | $ 5,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Mar. 15, 2016 | Jul. 31, 2015 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 28, 2017 |
Related Party Transactions (Textual) | |||||||
Business acquisition, equity interest issued number of shares | 4,985,780 | 3,642,084 | |||||
Membership interests exchanged for additional issuance of common stock | 6,300,000 | ||||||
Common stock issued | 17,805,234 | 11,064,664 | 8,836,421 | ||||
Customer deposits | $ 688,275 | $ 165,094 | $ 754,545 | ||||
Interest rate | 10.00% | ||||||
Senior secured convertible note due date | Apr. 28, 2018 | ||||||
Senior secured convertible note, percentage | 10.00% | ||||||
Pilatus Business Aircraft, Ltd [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Purchase special mission modifications | 7,300,000 | ||||||
CAF [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Total billings | 53,082 | ||||||
Currently hold in customer deposit | 750,000 | ||||||
Customer deposits | 500,000 | ||||||
Notes Payable | 62,018 | 0 | |||||
Total purchases, value | 723,756 | 0 | |||||
Jackson River Aviation [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Total purchases | $ 3,459,758 | $ 196,035 | 304,025 | 335,795 | |||
Total billings | 845,887 | 57,053 | 143,995 | 25,706 | |||
Net outstanding receivables | 38,962 | ||||||
Net outstanding payable | 170,025 | 7,958 | |||||
Jackson River Aviation [Member] | Maximum [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Lease expense | 10,000 | ||||||
Jackson River Aviation [Member] | Minimum [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Lease expense | 4,000 | ||||||
Tempus Intermediate Holdings, LLC [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Total purchases | 2,247,955 | 1,125,246 | 1,331,510 | 1,943,992 | |||
Total billings | 806,023 | 136,482 | 280,296 | 776,025 | |||
Net outstanding payable | 636,591 | 1,284,886 | 295,561 | ||||
Southwind Capital LLC [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Total purchases | 0 | $ 116,545 | 142,496 | 0 | |||
Net outstanding payable | 142,496 | $ 142,496 | $ 0 | ||||
Chief Financial Officer [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Purchase of membership interests, description | In connection with the formation of Tempus, the Company's former Chief Financial Officer, R. Lee Priest, Jr., loaned Tempus $500,000. Of this amount, $10,101 was allocated to the purchase of 1.0% of the membership interests of Tempus, and $489,899 took the form of a loan from an officer. | ||||||
Interest rate | 5.00% | ||||||
Senior secured convertible note, percentage | 5.00% | ||||||
Chief Executive Officer [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Non-cash consideration | $ 500,000 | ||||||
Common stock issued | 242,131 | ||||||
Cash consideration | $ 500,000 | ||||||
Santiago Business Co. International Ltd [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Total billings | 48,996 | ||||||
Monthly fee expense for services | $ 12,500 | ||||||
Santiago Business Co. International Ltd [Member] | Subsequent Event [Member] | |||||||
Related Party Transactions (Textual) | |||||||
Outstanding balance for services | $ 48,996 |
Warrants (Details)
Warrants (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
IPO & Placement Warrants [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Quantity | $ 7,875,000 |
Strike Price | 11.50 |
Series A Warrant [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Quantity | 3,187,500 |
Strike Price | 4.80 |
Series B Warrant [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Quantity | |
Strike Price | $ 5 |
Warrants (Details Textual)
Warrants (Details Textual) - USD ($) | Aug. 14, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Dec. 31, 2016 | Sep. 30, 2017 | Jun. 24, 2016 | Feb. 29, 2016 | Feb. 24, 2016 | Feb. 03, 2016 | Jan. 22, 2016 | Dec. 31, 2015 |
Warrants (Textual) | |||||||||||
Warrants outstanding | $ 7,875,000 | ||||||||||
Warrant sale price | $ 2.05 | ||||||||||
Weighted average prices of common stock | 56.30% | ||||||||||
Excess warrants price maximum | 9.99% | ||||||||||
Excess warrants price minimum | 4.99% | ||||||||||
Preferred stock, shares issued | 4,578,070 | 0 | 1,369,735 | ||||||||
Preferred stock issued value | $ 458 | $ 137 | |||||||||
Common stock, shares issued | 11,064,664 | 17,805,234 | 8,836,421 | ||||||||
Common stock issued value | $ 1,106 | $ 1,781 | $ 884 | ||||||||
IPO Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants outstanding | $ 7,875,000 | ||||||||||
Initial public offering | $ 7,500,000 | ||||||||||
Warrant exercise price | $ 11.50 | ||||||||||
Warrants price outstanding | 0.01 | ||||||||||
Warrant sale price | $ 17.50 | ||||||||||
Placement Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Initial public offering | $ 375,000 | ||||||||||
Series A-1 Warrants and Series A-2 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants issued (in shares) | 3,000,000 | ||||||||||
Series B-1 Warrants and Series B-2 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants issued (in shares) | 1,000,000 | ||||||||||
Series A-3 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants issued (in shares) | 187,500 | ||||||||||
Series B-3 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants issued (in shares) | 62,500 | ||||||||||
Series A Warrant [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants outstanding | $ 3,187,500 | 3,187,500 | |||||||||
Warrant exercise price | $ 4.80 | ||||||||||
Warrants expire | Jul. 31, 2020 | ||||||||||
Series B Warrant [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants outstanding | $ 0 | $ 1,062,500 | |||||||||
Warrant exercise price | $ 5 | ||||||||||
Market price description | On October 31, 2016 or April 30, 2017, as applicable, if 90% of the average of the four lowest volume-weighted average prices of common stock for the preceding 10 trading days (the "Alternative Market Price") is less than $4.00 (subject an Alternative Market Price floor of $1.80), the holder of a Series B Warrant can exercise such Series B Warrant to acquire on a cashless basis a number of shares of common stock or Preferred Stock equal to (depending on the Market Price) up to 488.9% of the number of shares that could otherwise be purchased under such Series B Warrant pursuant to a cash exercise, with the lower the Alternative Market Price, the more shares being available for acquisition by the Series B Warrant holder pursuant to this alternative cashless exercise. | ||||||||||
Series B-1 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants expire | Apr. 30, 2017 | ||||||||||
Preferred stock, shares issued | 1,527,778 | 1,680,557 | |||||||||
Preferred stock issued value | $ 2,979,167 | $ 3,361,114 | |||||||||
Series B-2 Warrants and Series B-3 Warrants [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Warrants expire | Oct. 31, 2016 | ||||||||||
Common stock, shares issued | 1,344,446 | 641,666 | |||||||||
Common stock issued value | $ 1,546,113 | $ 1,251,249 | |||||||||
Series A-1 [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Weighted average prices of common stock | 35.00% | ||||||||||
Series A-2 [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Weighted average prices of common stock | 18.00% | ||||||||||
Series A-3 [Member] | |||||||||||
Warrants (Textual) | |||||||||||
Weighted average prices of common stock | 3.30% | ||||||||||
Series A-1 Warrants and Series B-1 Warrants | |||||||||||
Warrants (Textual) | |||||||||||
Excess warrants price maximum | 4.99% |
Basic and Diluted Shares Outs69
Basic and Diluted Shares Outstanding (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2017 | |
Basic and Diluted Shares Outstanding (Textual) | |||
Weighted average basic shares outstanding | 10,276,046 | 5,807,166 | |
Common stock, shares outstanding | 11,064,664 | 8,836,421 | 17,805,234 |
Business Combination (Details)
Business Combination (Details) | Jul. 31, 2015USD ($) | |
Assets | ||
Cash and cash equivalents | $ 4,128,746 | |
Due from Sponsor | 660 | |
Total assets | 4,129,406 | |
Liabilities | ||
Accounts payable | 100,027 | |
Payable to affiliates of the Sponsor | 6,614 | |
Accrued expenses | 25,000 | |
Warrant liability | 1,471,900 | |
Total liabilities | 1,603,541 | |
Net assets acquired over liabilities assumed | 2,525,865 | |
As Recorded by Chart Acquisition Corp [Member] | ||
Assets | ||
Cash and cash equivalents | 4,128,746 | [1] |
Due from Sponsor | 660 | [2] |
Total assets | 4,129,406 | |
Liabilities | ||
Accounts payable | 100,027 | [2] |
Payable to affiliates of the Sponsor | 6,614 | [2] |
Accrued expenses | 25,000 | [2] |
Warrant liability | 1,808,176 | |
Total liabilities | 1,939,817 | |
Net assets acquired over liabilities assumed | 2,189,589 | |
Adjustments [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Due from Sponsor | ||
Total assets | ||
Liabilities | ||
Accounts payable | ||
Payable to affiliates of the Sponsor | ||
Accrued expenses | ||
Warrant liability | (336,276) | [3] |
Total liabilities | $ (336,276) | |
[1] | Pursuant to the Business Combination and the Financing, the Company received $16,000,000 in cash related to the sale of common stock, preferred stock and warrants. The use of the proceeds is summarized as follows: | |
[2] | As part of the Business Combination, Tempus assumed the working capital (liabilities) of Chart, net of cash and warrant liability, in the amount of ($130,981). Please see the consolidated statements of cash flows. | |
[3] | Based on the valuation report of the Valuation Firm, (see Note 11 above) valuing the warrants as of July 31, 2015, the date of the Business Combination, the warrant liability carried on the balance sheet of Chart has been adjusted to the value calculated by the Valuation Firm. |
Business Combination (Details 1
Business Combination (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combination [Abstract] | ||
Issuance of common stock, preferred stock and warrants pursuant to Business Combination and Financing (see Note 17) | $ 16,000,000 | |
Payment of costs related to the Business Combination and Financing | (12,214,875) | |
Cash from business acquired pursuant to the Business Combination | 212,640 | |
Net cash proceeds related to Business Combination | $ 3,997,765 |
Business Combination (Details T
Business Combination (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combination (Textual) | |||
Business acquisition, equity interest issued number of shares | 4,985,780 | 3,642,084 | |
Earn-out shares | 6,300,000 | ||
Number of shares received under merger consideration | 57,916 | ||
Business combination aggregate cash investments | $ 4,128,746 | ||
Business combination description | (i) the Affiliate Investors received an aggregate of 1,375,000 shares of Tempus Holdings common stock, 1,031,250 Series A-2 Warrants and 343,750 Series B-2 Warrants (collectively, the "Affiliate Investor Securities") and (ii) the New Investors received an aggregate of 1,255,265 shares of Tempus Holdings common stock, 1,369,735 shares of Tempus Holdings preferred stock, 1,968,750 Series A-1 Warrants and 656,250 Series B-1 Warrants. | ||
Business combination aggregate common shares | 2,808,329 | ||
Issuance of common stock, preferred stock and warrants pursuant to Business Combination and Financing (see Note 17) | $ 16,000,000 | ||
Net of cash and warrant liability | (130,981) | ||
Warrants redemption value | 6,675,200 | ||
Chief Financial Officer [Member] | |||
Business Combination (Textual) | |||
Business combination transactions amount | 500,000 | ||
Investor [Member] | |||
Business Combination (Textual) | |||
Business combination transactions amount | 10,500,000 | ||
Mr. Joseph Wright [Member] | |||
Business Combination (Textual) | |||
Business combination transactions amount | $ 5,000,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Discontinued Operations [Abstract] | |||
Current assets of discontinued operations | $ 5,223 | $ 65 | |
Noncurrent assets of discontinued operations | 501,711 | ||
Current liabilities of discontinued operations | 2,799 | 569,937 | |
Net assets of discontinued operations | $ 2,424 | $ (68,161) |
Discontinued Operations (Deta74
Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Discontinued Operations [Abstract] | ||||
Revenue | $ 668,150 | $ 1,256,881 | ||
Gross profit | (279,179) | (960,075) | ||
Selling, general and administrative expenses | (111,250) | (261,998) | ||
Depreciation and amortization | (770) | (1,472) | ||
Net loss from discontinued operations | $ (391,199) | $ (1,223,545) |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | Mar. 01, 2017 | Nov. 28, 2017 |
Stock Purchase Agreement [Member] | ||
Subsequent Event (Textual) | ||
Acquired percentage of outstanding shares of common stock | 100.00% | |
Accrued but unpaid third-party liabilities | $ 500,000 | |
Liabilities related to maintenance | 500,000 | |
Intangible assets and accrued liabilities, decreased | $ 500,000 | |
Subsequent Event [Member] | ||
Subsequent Event (Textual) | ||
Subsequent event, description | i. On August 14, 2017, the Company entered into a definitive purchase agreement for the acquisition of six Lockheed L-1011, subject to satisfactory completion of inspection of the aircraft. The inspection was completed satisfactorily by the end of October, 2017. The closing of the transaction is now only subject to the seller fulfilling their obligations under the purchase agreement to remove all liens on the aircraft. The sale is expected to close in the fourth quarter of 2017. As payment for the aircraft, the Company expects to issue approximately 6.7 million shares to the seller during the fourth quarter of 2017. ii. On October 6, 2017, the Company entered into an equity financing agreement with GHS Investments LLC, a Nevada limited liability company, under which the Company may issue, over the next 24 months, shares of common stock representing up to an aggregate of $12,000,000 of equity financing. The number of shares to be issued would depend on the price per share, which will be based on a discount to the volume weighted average market price of the shares during a 10-trading day period. Shares issued under the equity financing agreement are subject to a registration rights agreement. iii. On November 22, 2017, the Company notified one of its customers that the Company was terminating an aircraft management agreement with them due to their on-going and repeated failure to make payment in full of all amounts due under the contract. The contract represents a material portion of the Company’s consolidated revenues ($4.0 million for the first nine months of 2017), but has not contributed significantly to either consolidated gross profit or net profit. The Company also informed the customer that it would seek damages for losses and expenses in light of the customer’s repudiatory breach of the contract. Depending on the outcome of negotiations with the customer, and possibly litigation, the receivables owed to the Company for services rendered, together with damages, would be applied against the operating deposit of $750,000 to be repaid to the customer following contract termination. |